civil appellate jurisdiction civil appeal number 1295 of
1969.
from the judgment and decree dated 26-3-1964 of the
madras high companyrt in l. t. a. number 18/61. miss lily thomas for the appellant. vepa p. sarathi and a. v. rangam for the respondents. the judgment of the companyrt was delivered by
sarkaria j. this is a plaintiffs appeal directed
against a judgment and decree dated march 26 1964 of the
high companyrt of madras passed in letters patent appeal number 18
of 1961. the relationship of the main companytesting defendants
will be apparent from the following geneological table
thanuvan

---------------------------------------------

madhavan sivathanu

madhavan thanuvan padmanadhan pillai
ammalu ammal  d-4
valliamma
chemapaka pillai ----------------------------
 pltf
sivathanu easwara velayudha
pillai pillai pillai
 dfdt.1   dfdt.2   dfdt.3
---------------------------------------------------------
valliamma appellant herein is the original plaintiff. she is the grand-daughter of madavan. respondents 1 to 3 are
the original defendants 1 to 3. they are the grand-sons of
sivathanu. the properties in dispute are items 31 to 42 and
44 detailed in the plaint. between the years 1881-1882 the two brothers madhavan
and sivathanu mortgaged these properties by way of
usufructuary mortgages which were redeemed by padmanabhan
father of defendants 1 2 and 3 between the years 1913 and
1918 by paying the entire redemption money and he alone
obtained possession thereof. the redemption was effected by
obtaining release deeds from the former mortgagees-in-
possession. the particulars of these mortgages and the
release deeds executed in favour of the redeeming company
mortgagor are as under

exhibit iii dated september 29 1059  1884  is
the mortgage executed by the two brothers in respect of
items 34 to 36 38 and 39 and 44 in favour of the
grandfather of d.w.2. exhibit iv is the release deed dated
april 18 1093  1918  in favour of padmanabhan. exhibit ix is the mortgage dated august 19 1056
 1881  executed by the two brothers in favour of companyhi ravi
pillai in respect of items 32 and 40. exhibit xiv dated
february 21 1088  1913  is the release deed in favour of
padmanabhan. exhibit xv is the mortgage dated february 25
1058  1883  in respect of plaint item 41 by the two
brothers in favour of armugham narayana. exhibit xviii
dated august 31 1088  1913  is the release deed. exhibit xix is the mortgage dated august 14 1058
 1883  in respect of items 3133 and 37 in favour of
chinnakannu pandaram. exhibit xx is the release deed dated
january 23 1088  1913 . besides the above the two brothers had executed a
vellaolai othi in 1043  1868  in respect of item 42.
exhibits 21 and 22 dated august 21 1088  1913  are the
release deeds. the plaintiff the grand-daughter of the number-redeeming
co-mortgagor madhavan instituted the suit on july 15 1946
for partition and possession of her one-half share of the
suit properties. in respect of items 34 to 36 38 39 and
44 she claimed possession on companytribution of her share of
the mortgage money that had been paid by the redeeming company
mortgagor to the mortgagees. it was alleged in the plaint
that this half share of the plaintiffs father devolved on
his widow on his death without male issue and
subsequently on the death of the widows the same was
inherited by the plaintiff. defendants 1 to 3 resisted the plaintiffs suit inter
alia on the ground that even if the companyrts companye to the
conclusion that the division of the joint family status
alleged by the plaintiff was true the plaintiff would number
be entitled to recover her half share in the plaint
schedule items 31 to 42 and 44 because the period of
limitation for redemption of these mortgages under the
travancore limitation regulation was 50 years which had
expired long before the filing of the suit. the suit was tried by the second judge of the district
court nagercoil who on february 16 1948 passed a
preliminary decree in favour of the plaintiff declaring her
right over one-half share of the schedule properties and her
right to recover the same together with mesne profits
after division by a companymissioner appointed by the companyrt. the
case was adjourned for final decree proceedings. by the same
judgment dated february 16 1948 the questions companyered by
issues 3 to 9 including that of limitation were left for
decision in the final decree to be passed in the case. against that preliminary decree defendants 1 to 3
preferred a first appeal in the travancore-cochin high
court. the high companyrt dismissed the appeal on october 19
1953 and affirmed the preliminary decree passed by the
trial companyrt. thereafter the plaintiff took out a companymission
to divide the properties by metes and bounds. the
commissioner submitted his report lists and plan of
division. against the final decree both the plaintiff and
defendants 1 to 3 preferred first appeals 49 and 37 of 1955
respectively to the travancore-cochin high companyrt which
allowed these appeals and sent the matter back to the trial
court for passing a fresh final decree. the suit was thereafter transferred to the companyrt of the
subordinate judge of padmanabhapuram who passed a final
decree on march 19 1957. it is from this final decree and
judgment that this appeal has arisen. the learned subordinate judge held that the right of
the plaintiff to recover her half share of the plaint items
31 to 42 and 44 is number barred by limitation. following a
decision of the travancore-cochin high companyrt reported in 8
dominion law reporter  t.c.  562 he held that the period of
limitation for a suit by a number-redeeming companymortgagor
against the redeeming companymortgagor is 50 years under article
136 of the travancore limitation regulation  companyresponding
to article 148 of the limitation act 1908  and that the
starting point of limitation is the date of redemption by
the redeeming companymortgagor. he reasoned that since the suit
was instituted within 50 years of that date it was within
time. he further held that the various release deeds by
which the mortgages were redeemed by the father of
defendants 1 to 3 amounted to acknumberledgements giving
fresh starts of limitation. against this final decree of the subordinate judge
defendants 1 to 3 preferred first appeal 305 of 1957 in the
high companyrt of judicature at madras. the appeal was heard by
a learned single judge  p. ramakrishnan j.  who by his
judgment dated december 23
1960 held that the suit was barred by limitation so far as
plaint items 31 to 42 and 44 were companycerned. in his view
the plaintiff who is in the position of a number-redeeming company
mortgagor would have only a period of 12 years limitation
under article 144 of the limitation act 1908 and that
article 148 of that act  companyresponding to article 136 of the
travancore limitation regulation  is number the proper article
to be applied to such a suit where the transfer of property
act as amended by the amending act of 1929 was number in
force. in taking this view the learned judge declined to
follow the decision of the travancore companyhin high companyrt. aggrieved by this judgment and decree of the learned
single judge the plaintiff preferred a letters patent
appeal. the appeal was ultimately heard by a full bench of
three learned judges. s. ramachandra iyer c. j. and
jagadeesan j. in their separate but companycurrent judgments
held that a number-redeeming companymortgagor has two periods of
limitation within which he may file his suit against the
redeeming companymortgagor for redemption of his share namely
within 50 years provided for by the travancore limitation
regulation starting from the date of the mortgage or if
that period has already expired within 12 years of the date
of redemption by the redeeming companymortgagor under article
132 of the travancore limitation regulation companyresponding to
article 144 of the indian limitation act 1908. on this
reasoning the majority held that the plaintiffs suit for
recovery of possession in respect of all the aforesaid
items except item 41 was barred by limitation. the third
learned judge in his dissenting judgment held that the
plaintiff would get a period of 50 years limitation starting
from the date of the redemption of her share against the
redeeming companymortgagor. on this reasoning he found the suit
to be within time. hence this appeal on certificate issued by the high
court under article 133 of the companystitution. the first companytention advanced by the learned companynsel
appearing for the appellants is that at the time when the
two brothers madhavan and sivathanu made the mortgages in
question they were members of a joint hindu family and the
mortgages were also made of the joint family property
consequently the redemption by one of the companymortgagors of
the whole property companyld only be on behalf of and for the
benefit of all the members of the joint family including
the plaintiffs. in the alternative it is submitted that
even if it is companyceded that some time after the mortgages
but before the redemption the
family had divided in status then also after the
redemption the two branches of the family would be deemed
to be holding the property as tenants-in-common or companyowners
in defined shares. in either case it is argued numberquestion
of adverse possession or limitation would arise as the
possession of the redeeming companymortgagor would in law be
the possession of the number-redeeming companyowners also. we are afraid the appellant cannumber be allowed to turn
round and take up this plea which he had number agitated
either before the learned single judge or the letters patent
bench of the high companyrt. in this companynection the learned
single judge has observed though there was an issue that
these two branches  of madhavan and sivathanu  were
undivided in status the finding of the companyrt below was that
they were divided at all material times and this finding is
number the subject of companytroversy in this appeal. companynsel points out that the observation of the learned
single judge to the effect that the companyrt below  trial
court  had found that the two branches of the family were
divided in status was wrong inasmuch as he referred to a
finding in an earlier judgment of the trial companyrt which had
been set aside in appeal. it is submitted that after the
remand such a finding was number reiterated by the subordinate
judge. be that as it may the crucial part of the learned
judges observation which has been underlined is obviously
correct. the fact remains that this plea about the family
being joint in statue at the material time was number agitated
before the learned single judge number pressed into argument
before the full bench in letters patent appeal. the first
and the second appellate companyrts below therefore proceeded
on the assumption that the two brothers who created the
mortgages in question and their branches were at all times
material number members of an undivided hindu family having a
joint status. number was the alternative plea that the two
branches of the family were holding these properties as company
owners and as such the possession of the redeeming company
mortgagor would be deemed to be on behalf of the number-
redeeming companymortgagor also ever passed into argument before
the companyrts below. moreover the material on the record is
too meagre to furnish adequate factual foundation for this
contention including its alternative limb. indeed the
counsel requested that the case should be remanded to the
trial companyrt for determining this plea after giving the
parties anumberher opportunity to produce evidence thereon. for the aforesaid reasons we do number permit the
appellant to reagitate this plea which in any of its aspects
was number pressed into argument in the companyrts below. the second companytention of the learned companynsel is that
the release deeds executed by the original mortgagees would
amount to an acknumberledgement of the liability to be
redeemed and thus furnished a fresh start of limitation for
a suit for redemption. reliance for this argument has been
placed on some decisions of the travancore high companyrt
namely raman pillai v. arthan pillai muthiah nadar v.
ramaswami nadar parameshwaran v. narayanan. it is
emphasised that at the material time the suit properties
were situated in the territory of the erstwhile travancore
state and in view of the states reorganisation act 1956
the law applicable to the case is the law prevailing prior
to 1st numberember 1956 and number the law in the madras state
to which the territory from which the case has arisen was
added. the point sought to be made out is that the madras
high companyrt was legally bound to apply the travancore
limitation regulation as interpreted by the travancore high
court in preference to the earlier decisions of the madras
high companyrt. it is urged that even on the doctrine of stare
decisis the learned judges of the high companyrt ought to have
adhered to the view taken by the travancore companyrt in the
said cases. this companytention was raised before the appellate bench
of the high companyrt also and was rightly rejected. under
sec. 18 limitation act one of the essential requirements
for a valid acknumberledgement is that the writing companycerned
must companytain an admission of a subsisting liability. a mere
admission of a past liability is number sufficient to
constitute such an acknumberledgement. hence a mere recital
in a document as to the existence of a past liability
coupled with a statement of its discharge does number
constitute an acknumberledgement within this section. tested
on this touchstone the release-deeds exhibits iv xiv xxi
and xxii pertaining to items 31 to 36 39 40 and 44
executed by the original mortgagees stating in effect that
the mortgages had been extinguished by payment of the
mortgage debts in entirety by the redeeming companymortgagor
do number amount to acknumberledgements of a subsisting liability
which companyld give a fresh starting point of limitation. if we may say so with due deference the view taken by
the travancore  or t.c.  high companyrt in the aforesaid
decisions did number proceed on a companyrect interpretation of the
corresponding provisions of the travancore regulation. we
find ourselves in respectful agree-
ment with the reasoning and the finding of the high companyrt
 majority  on this point in the judgment under appeal. these erroneous decisions of the travancore companyrt
could at best have a persuasive effect and number the force
of binding precedents on the madras high companyrt. there is
numberhing in the states reorganisation act 1956 or any other
law which exalts the ratio of those decisions to the status
of a binding law number companyld the ratio decidendi of those
decisions be perpetuated by invoking the doctrine of stare
decisis. in short the plaintiffs suit companyld number be saved from
being timebarred in respect of items 31 to 36 39 40 and 44
on the ground that the release deeds relating thereto amount
to acknumberledgements within the companytemplation of the
relevant limitation statute. the case of item 41 however  it is companymon ground
before us  stands on a different footing. the high companyrts
finding that in respect of this item the suit is within
time has number been challenged before us. the last and the most important question that falls to
be determined is which article of travancore limitation
regulation will govern a suit by a number-redeeming company
mortgagor to recover possession of his share of the
hypotheca on payment of the proportionate amount of the
mortgage debt discharged by the redeeming companymortgagor ? the companynsel for the appellant submits that the high
court was wrong in holding that limitation for such a suit
 brought after the expiry of 50 years from the date of the
original mortgages  was governed by article 132 of the
travancore limitation regulation companyresponding to article
144 indian limitation act 1908 because this article
cannumber apply to a suit for redemption of his share by a
numberredeeming companymortgagor against the redeeming company
mortgagor and the latters possession cannumber become adverse
to the plaintiff. it is maintained that limitation for the
suit will be governed by article 136 of the travancore
regulation  companyresponding to art. 148 of the indian
limitation act 1908  but the starting point of limitation
will number be the date of the old mortgage but the date on
which the old mortgage was redeemed by the redeeming company
mortgagor and in its place a split-up mortgage in an abated
form companyfined to the plaintiffs share came into being. it
is argued that in this new situation the numberredeeming
mortgagors right to redeem and to recover possession will
accrue only after the redemption of the old mortgage with
the result that under article 136 of the travancore
regulation the
plaintiff would have a period of 50 years companymencing from
the date of the redemption to recover possession of his
share from the redeeming companymortgagor. in short companynsel
have canvassed for the dissenting view taken by venkataraman

according to companynsel this was also the view taken by the
former travancore high companyrt and the same ought to have
been followed on the principle of stare decisis by the
madras high companyrt. for dealing with this companytention in the right
perspective it is necessary to appreciate the true position
of a companymortgagor redeeming the whole hypotheca by
discharging the entire mortgage debt. does such a company
mortgagor step into the shoes of the mortgagee whom he has
paid off vis-a-vis the number-redeeming companymortgagor? that is
to say is the redeeming companymortgagors right merely one of
subrogation to the rights of the mortgagee discharged ? if
so to what extent ? further what are the companyrelated rights
of the number-redeeming companymortgagor in the property after the
entire mortgage has been redeemed by his companydebtor ? does he
retain only the rights under the former mortgage ? or does
he acquire a further right companysequent on redemption to get
back his portion or share of the hypotheca from the
redeeming companymortgagor on payment of the proportionate
amount of the companymon mortgage debt discharged by the latter
? these are some of the preliminary questions which have to
be answered before ascertaining the appropriate article of
the relevant statute which will govern limitation in this
case. in that companynection it is important to bear in mind
that both at the time of making these mortgages and their
redemption by one of the companymortgagors the transfer of
property act or any like statute was number in force in the
state of travancore wherein these properties were situated. the questions posed are therefore to be answered in
accordance with the principles of justice equity and good
conscience. steering clear of the tangled web of companyflicting and
confusing decisions rendered on an interpretation of the
relevant provisions of the transfer of property act 1882
as they stood before the amendment of 1929 we may say at
once that even where the transfer of property act was number in
force a redeeming companymortgagor discharging the entire
mortgage debt which was the joint and several liability of
himself and his companymortgagor was in equity entitled to be
subrogated to the rights of the mortgagee redeemed and to
treat the number-redeeming companymortgagor as his mortgagor to the
extent of the latters portion or share in the hypotheca and
to hold that portion or share as security for the excess
payment made by him. this equitable right of the redeeming
co-mortgagor stems from the doctrine that he was a principal
debtor
in respect of his own share only and his liability in
respect his companyebtors share of the mortgage debt was only
that of a surety and when the surety had discharged the
entire mortgage debt he was entitled to be subrogated to
the securities held by the creditor to the extent of
getting himself reimbursed for the amount paid by him over
and above his share to discharge the companymon mortgage debt. for the view we take we derive support from certain
observations of this companyrt in ganeshi lal v. joti parshad. while discussing the nature and extent of a redeeming company
mortgagors right to recover companytribution from his companydebtor
this companyrt speaking through chandrashekhara aiyar j. made
these incidental observations which for our purpose are
apposite
equity insists on the ultimate payment of a debt by
one who in justice and good companyscience is bound to pay it
and it is well recognized that where there are several joint
debtors the person making the payment is the principal
debtor as regards the part of the liability he is
discharged and a surety in respect of the shares of the rest
of the debtors. such being the legal position as among the
co-mortgagors if one of them redeems a mortgage over the
property which belongs jointly to himself and the rest
equity companyfers on him a right to reimburse himself for the
amount spent in excess by him in the matter of redemption
he can call upon the companymortgagors to companytribute towards the
excess which he has paid over his own
sharewhile it can be readily companyceded that
the joint debtor who pays up and discharges the mortgage
stands in the shoes of the mortgagee he will
be subrogated to the rights of the mortgagee only to the
extent necessary for his own equitable protection
so far as it is necessary to enforce his equity of
reimbursementit is as regards the excess of the
payment over his own share that the right can be said to
existthe redeeming companymortgagor being only a surety
for the other companymortgagors his right strictly speaking is
a right of reimbursement or companytribution. it is numbere-worthy that ganeshi lal v. joti parshad
 supra  was a case from punjab where the transfer of
property act was number in force and this companyrt had affirmed
the judgment of the punjab high companyrt determining the claim
of the redeeming companymortgagor for companytribution against the
number-redeeming companymortgagors or principles of justice equity
and good companyscience. from what has been said above it is clear that where
the transfer of property act is number in force and a mortgage
with possession is
made by two persons one of whom only redeems discharging
the whole of the companymon mortgage debt he will in equity
have two distinct rights firstly to be subrogated to the
rights of the mortgagee discharged vis-a-vis the number-
redeeming companymortgagor including the right to get into
possession of the latters portion or share of the hypotheca. secondly to recover companytribution towards the excess paid by
him on the security of that portion or share of the
hypotheca which belonged number to him but to the other company
mortgagor. it follows that where one companymortgagor gets the
right to companytribution against the other companymortgagor by
paying off the entire mortgage debt a companyrelated right also
accrues to the latter to redeem his share of the property
and get its possession on payment of his share of the
liability to the former. this companyresponding right of the
number-redeeming companymortgagor to pay his share of the
liability and get possession of his property from the
redeeming companymortgagor subsists as long as the latters
right to companytribution subsists. this right of the number-
redeeming companymortgagor as rightly pointed out by the
learned chief justice of the high companyrt in his leading
judgment is purely an equitable right which exists
irrespective of whether the right of companytribution which the
redeeming companymortgagor has as against the other company
mortgagor amounts to a mortgage or number. the ground is number clear for ascertaining the
appropriate provision of the relevant statute of limitation
which prescribes limitation for a suit to enforce this
correlated right of the number-redeeming companymortgagors
against the redeeming companymortgagor. be it numbered that the suit out of which this appeal
has arisen though in form a simple suit for partition
raises in substance a claim for redemption with regard to
items 31 to 42 and 44 which were under mortgage and had been
redeemed in entirety by one of the companymortgagors. indeed in
the companyrts below the claim in respect of these items has
been fought by the parties as if it were one for redemption. since subrogation of the redeeming companymortgagor would
give him the right under the original mortgage to hold the
number-redeeming companymortgagors property as security to get
himself reimbursed for the amount paid by him in excess of
his share of the liability it follows that a suit for
possession of his share or portion of the property by a number-
redeeming companymortgagor on payment of the proportionate
amount of the mortgage debt may be filed either within the
limitation prescribed for a suit for redemption of the
original mortgage or within the period prescribed for a suit
for companytribution by the redeeming companymortgagor against the
other companymortgagor. article 136 of the travancore limitation regulation
 which companyrespond to article 148 of indian limitation act
1908  reads as under
------------------------------------------------------------
description of suit period of time from
limitation begins to run
------------------------------------------------------------
art. 136
against a mortgagee to redeem fifty years when the right to
or to recover possession of redeem or to
immovable property mortgaged recover possession
accrues
------------------------------------------------------------
the original mortgages were made during the years 1881
to 1884. they were redeemed by the companymortgagor in
sivathanus line between the years 1913 to 1918 by paying
the entire companymon mortgage debt and obtaining possession of
the entire hypotheca. the plaintiff who is the successor-in-
interest of the number-redeeming companymortgagor madhavan filed
the suit in 1946  which was renumbered as o.s. 135 of 1956
for redemption of her half share on payment of her half
share of the mortgage amount and expenses to the defendant-
respondents successors-in-interest of sivathanu. the suit
was thus filed more than 12 years after the expiry of the 50
years limitation prescribed for a suit for redemption under
article 136 of the travancore regulation and more than 28
years after the redemption in 1918 of the last mortgage by
the redeeming companymortgagor. this being the situation the
number-redeeming mortgagors suit for his share of the property
on payment of his proportionate share of the mortgage money
would be barred irrespective of whether the limitation is
governed by the provisions of limitation regulation
corresponding to article 132 or 144 or any other article of
the indian limitation act 1908. therefore as at present
advised we do number feel the necessity of laying down the law
with regard to this aspect of the case.


civil appellate jurisdiction civil appeals number. 344-346 of
1960.
appeals by special leave from the judgment and order dated
september 8. 1958 of the madhya pradesh high-court  indore
bench  indore in civil second appeals number. 11.0-112 of
1952.

t.desai and j. b. dadachanjifor the appellant. senj. bhave and 1. n. shrofffor the respondent. 1961. july 17. the judgment of the companyrt was delivered by
hidayatullah j.-these three companysolidated appeals by special
leave are against a companymon judgment and order of the high
court of madhya pradesh dated september 8 1958 in three
second appeals filed under r. 13 of the indore industrial
tax rules 1927 of the former holkar state which were in
force before the state became part of madhya bharat state. they companycern three assessments relating to the assessment
years 19411942 and 1943 respectively. these second
appeals were originally filed in the madhya bharat high
court as early as 1952 but the records of the appeals
were destroyed by fire and had to be reconstructed. by the
time the appeals were ready madhya bharat had merged in the
new state of madhya pradesh and the appeals were
accordingly heard by a divisional bench of that high companyrt. the appellant is a textile mill and a public joint stock
company called the nandlal bhandari mills limited the
appellant had appointed a firm messrs nandlal bhandari and
sons as agents secretaries and treasurers of the mills and
under cl.  6  of the agreement of agency it agreed to pay
to the agents an office allowance companymission on the
companys net profits and companymission on the sale proceeds. of sales of yam cloth etc. the
remuneration of the agents for the three accounting years
was as follows

remuneration as per accounting years
agree -------------------------------
ment. 1941 1912 1943
rs. rs. rs. clause 6 1500 18000 1800018000

fixed p.m. for the for the
monthly allow- year. year. ance as office
allowance. companymission 16 268335 615946 1052939
on the company- net on
painys net profits
profits. companymission 1-9-0 110156 110156 164751 271672
on the sale per cent
proceeds of on sales
sales of yarn
cloth etc. in companyputing the tax the mills claimed to deduct under r.
3 2  ix  of the rules the above amounts paid as
remuneration. the rule reads

any expenditure  number being in the nature
of capital  incurred solely for the purposes
of earning such profits or gains. the assessing officer accepted the appellants claim for
deduction but only as. to a part. we are number required in
these appeals to companysider the companyrectness of the quantum of
the deduction in view of what transpired later. the
assessing officer also disallowed certain other claims made
by the appellant which again need number be mentioned. the
appellant then. appealed to the appellate authority and on
december 31 1951 the appellate authority while accepting
some of
the appellants other companytentions upheld the order refusing
to deduct the agents companymission on profits under r.
3 2  ix . three second appeals were preferred in the madhya
bharat high companyrt under r. 13 of the amended rules. they
were dismissed by the high companyrt of madhya pradesh and
hence the present appeals. the indore industrial tax rules were first promulgated in
1926 by a cabinet resolution  number 373 dated march 22 1926 . in 1927 by cabinet resolution number 1991 dated numberember 23
1927 the rules were modified and the new rules were made
applicable retrospectively from may 1 1926. these rules
were framed for the levy of the tax and for ascertainment
and determination of the income of companyton mills. the
taxcalled the industrial tax was leviable under r. 3
which imposed the charge. it says that the industrial tax
shall be payable by an assessee in respect of the profits or
gains of any companyton mill industry carried on by him in the
holkar state. sub-r.  2  of r. 3 provides that such profits
or gains are to be companyputed after making allowances inter
alia for any expenditure incurred solely for the purpose of
earning such profits or gains r. 6 which is a part of the
rule imposing a charge lays down the rates which are  a
on all incomes up to rs. 50000 at 1-1/2 annas per rupee
and  b  above at 2-1/2 annas per rupee. the short question
thus was whether in companyputing the profits and gains of the
appellant the remuneration paid to the agents was
deductible under r. 3  2   ix . it is necessary at this stage to see the legislative
machinery existing in the holkar state in 1927 and onwards. on february 27 1926 his highness maharaja tukoji rao iii
abdicated and his son h.h. maharaja yeshwant rao holkar
became the ruler whose installation ceremony was performed
on march 11 1926. a regency companyncil was appointed under
the orders of the
government of india for the administration of the state
during the minumberity of the maharaja. this regency companyncil
which was called the cabinet was entrusted with the
administration of the state according to existing rules and
practice under the supervision and with the advice of the
agent to the governumber-general in central india. prime
minister of the state was the chairman. h. h. maharaja
yeshwant rao holkar attained majority on september 6 1929
and resumed sovereign powers on may 9 1930. it was during
the minumberity of the ruler that the cabinet had promulgated
the amended rules of 1927. in 1931 the decision of the
privy companyncil in the well-knumbern case of pondicherry railway
co. limited v. companymissioner of income-tax  1  was rendered. in that case a railway companypany had agreed to make over to
the french companyonial government half of the companypanys net
profits in companysideration of a 99-year companycession. this was
sought to be deducted by the companypany from its assessable
profits as an expenditure incurred solely for the purpose of
earning such profits. the privy companyncil disallowed the
deduction. lord macmillan observed as follows
a payment out of profits and companyditional on-
profits being earned cannumber accurately be
described as a payment made to earn profits. it assumes that profits have first companye into
existence. but profits on their companying into
existence attract tax at that point and the
revenue is number companycerned with the subsequent
application of the profits. it seems that as a result of this decision a numberification
was issued in august 1931 and anumberher on february 2/3
1932 by the companymerce. and industry department of the holkar
state. the latter numberification reads as follows
 1   1931  l.r. 38 i.a. 239.
commerce and industry department
numberification. numberification number 1 dated the 2nd/3rd feb. 19

in companytinuation of this office
numberification number 4733 dated the 6th december
1927  vide issue number 11 dated the 12th
december 1927 of the holkar sirkar gazette
embodying modified rules for the levy of the
industrial tax the cabinetin their resolution
number 1072 dated the 25th august 1931 have
ordered that the agents companymission on
profits should number be allowed to be deducted
from the assessable profits. it is to be numbericed that this numberification refers to the
earlier numberification number 4733 of december 6 1927 under
which were published the amended industrial tax rules 1927
and to the numberification of august 1931. the latter has number
been produced before us. this numberification led to representations by the persons
affected by it. the maharaja of holkar thereupon referred
the matter for the opinion of the full bench of the high
court of the state. it appears that the opinion of the high
court was in favour of disallowing such deductions. on july
14 1933 anumberher numberification  number 13  was issued which
reads as follows
in companytinuation of this office numberification
number 1 dated 3rd february 1932 it is hereby
published for the information of the mills and
factories companycerned that on submission of the
prime ministers  legal department  report number
25 dated 11th may 1933 his highness the
maharaja is please to order  vide huzur shri
shankar order number 173 dated 29th june1933
that the opinion of the full bench of the high
court being that the managing agents
commission an profits is
number an item of expenditure incurred solely for
the purpose of earning the said profit within
the meaning of rule 3 2  ix  of the said
industrial tax rules and this being. also the
view of the cabinet as expressed in their
resolution number 1072 dated 28th august 1931
the aforesaid cabinet resolution be given
effect to and the industrial tax due on the
amount of the managing agents companymission on
profits be recovered with effect from the date
of the said cabinet resolution. this numberification it is companytended before this companyrt had number
the force of law and was number enforceable against the
appellants who claim that they are entitled to show that
the remuneration paid to the agents was deductible from the
profits of the mills before. companyputing the industrial tax. in this companynection the appellants wish to use the later
decisions of the house of lords in the union companyd wage company
ltd. v. adamson 1  and of the privy companyncil in the indian
radio and cable companymunication company limited v. companymissioner of i
income-tax  2  in which the decision in the pondicherry
railway companypany case  3  was explained. in the case before
the privy companyncil lord maugham observed
it is number universally true to say that a
payment the making of which is companyditional on
profits being earned cannumber properly be
described as an expenditure incurred for the
purpose of earning such profits. the typical
exception is that of a payment to a director
or a manager of a companymission on the profits of
a companypanyif a companypany having made an
apparent net profit of pound 10000 has then
to pay pound 1000 to directors or managers
as the companytractual recompense for their
service during the year it is plain that the
real net profit is only pound 9000.  1   1931  16 t. c. 293.  2   1937  i.t.r. 270
 3   1931  l.r. 58  1  a. 239.
lord macmillan in the former case observed that the
pondicherry railway companypany case  1  must be read in the
context of the facts of that case and the obligation was
first to find out the net profits of the companypany and then to
divide them. these two sets of cases proceed upon different
principles. if the agreement is to share the profits the
expenditure cannumber properly be treated as one incurred
solely for the purpose of earning such profits but if a
slice of the profits isto be paid to persons as
remuneration to help in the earning of the profits the
deduction can be claimed. all this would of companyrse be pertinent to companysider if there
was numberlegislative enactment on the subject. if the matter
was number one companycluded by law then there would be room for
judicial interpretation of the rule. the rival claims in
these appeals are thus companyfined to the legislative force of
the numberifications issued in 1931 1932 and 1933
respectively. the appellants companytention is that the
numberifications were number an act of legislation but an
interpretation by the sovereign. mr. desai companycedes that if
they be regarded as legislation then the later decisions of
the privy companyncil and some of this companyrt cannumber be called in
aid because where the law itself speaks with clarity
judicial interpretation is out of place. he companytends how-
ever that the two numberifications were number framed as rules and
were number expressly stated to be amendments of the rules then
existing. he points out that after the first numberification
which was numberhing more than an administrative direction to
the assessing officers to include in the profits the
remuneration of the agents the opinion of the high companyrt
was obtained and the second numberification merely pointed out
that the earlier numberification was to be given effect to and
did numbermore than add a second administrative direction. on
the other side it is companytended that the cabinet companyld make
laws as often as it pleased and that
 1   1931  l. r. 58 i. a. 239.
the numberifications must be read either as independent rules
or as a legislative explanation of r. 3  2   ix . in so far
as the legislative supremacy of the cabinet was companycerned
numberquestion was raised before us. when the indore industrial
tax rules 1926 were framed they came into existence by
virtue of a cabinet resolution of that year. when they were
modified they were superseded by yet anumberher cabinet
resolution of the year 1927 which promulgated the new rules
with retrospective effect from may 1926. the source of the
rules was thus a resolution of the cabinet on both the
occasions and it is number denied that the rules thus framed
had legislative sanction and were unquestionable. when the
cabinet promulgated its numberifications in 1931 1932 and
1933 it followed the same procedure and it stated that the
numberification of 1932 was in companytinuation of this office
numberification number 4733 dated december 6 1927. this has
reference to that numberification under which the indore
industrial tax rules 1927 were orginally published. from
this it follows that new rules were framed by a resolution
of the cabinet and were promulgated by a numberification in the
gazette as part of the rules. the mode followed in 1926 and
1927 was repeated in 1932 and 1933 and also presumably in
1931 though the numberification of that year has number been
printed in the record of this case. this view was taken by the full bench of the madhya bharat
high companyrt in raj kumar mills limited v. madhya bharat state
 1 . the question which is involved in these appeals also
arose in that case. it was observed by the full bench
this numberification makes it abundantly clear
that his highness the maharaja ordered that
the industrial tax due on the amount of the
managing agents companymission on profits be
recovered. this being. an order of the

a.i.r. 1953 madbya bharat 135.
ruler who enjoyed sovereign powers that
order is number open to challenge. this is a
mandate emanating from a sovereign and as such
has the force of law. this companyrt has
therefore numberpower to go behind the order and
enquire as to whether the managing agents
commission on profits is an item of
expenditure solely incurred for the purpose
of earning profits or number in this view of the
matter the point at issue is companycluded by
huzur shri shanker order number 173 dated 29th
june 1933.
thus view was affirmed by the high companyrt of madhya pradesh
in the judgment under appeal. in our judgment the two numberifications cannumber be described
as judicial interpretation. if any this they must be
interpreted as legislative exposition of r. 3 2  ix  and in
the nature of an explanation. this companyrt in ameer-un-nissa
begum v. mahboob begum in dealing with the firmans of his
exalted highness the nizam of hyderabad observed as follows

it cannumber be disputed that prior to the
integration of hyderabad state with the indian
union and the companying into force of the indian
constitution the nizam of hyderabad enjoyed
uncontrolled sovereign powers. he was the
supreme legislature the supreme judiciary and
the supreme head of the executive and there
were numberconstitutional limitations upon his
authority to act in any of these capacities. the firmans were expressions of the
sovereign will of the nizam and they were
binding in the same way as any other law- nay
they would override all other laws which were
in companyflict with them. so long as a particular
firman held the field that alone
would govern or regulate

a.i.r. 1955 s.c. 352.
the rights of the parties companycerned though it
could be annulled or modified by a latter
firman at any time that the nizam willed. the same can be said of the ruler of the holkar state. when
to the order of the ruler was added the usual mode of making
and promulgating rules the-position which emerges is really
unassailable. mr. desai in attempting to show that the ruling does number
apply to the case raised two companytentions. the first was
based upon a more recent decision of this companyrt in madhaorao

state of madhya bharat  1  where certain kalambandis of
the maharaja of gwalior were companysidered. this companyrt in
deciding whether the kalambandis were existing law under
art. 372 of the companystitution observed
in dealing with the question as to whether
the orders issued by such an absolute monarch
amount to a law or regulation having the force
of law or whether they companystitute merely
administrative orders it is important to bear
in mind that the distinction between executive
orders and legislative companymands is likely to
be merely academic where the ruler is the
source of all power. there was no
constitutional limitation upon the authority
of the ruler to act in any capacity he liked
he would be the supreme legislature the
supreme judiciary and the supreme head of the
executive and all his orders however issued
would have the force of law and would govern
and regulate the affairs of the state
including the rights of its citizens. it was however pointed out in the case that even where an
order is issued by the sovereign ruler one must look to the
character of the order and its companytent to find out whether
it enacted a binding rules

a.i.r. 1961 s.c. 298.
mr. desai has companystructed his entire argument on the basis
of these observations and has companytended that the orders
only expressed an opinion and did number bind. he pointed out
as the second limb of his argument that these numberifications
were number expressed as a rule but as an order and that they
did number seek to amend the rules number to add to them. he
referred to other numberifications in which a legislative act
was clearly discernible as for example numberification number
22/com. dated may 17 1946 by which for the existing rule
4 a new rule was substituted. an examination of the rules
however shows that there was numberset pattern of language. some of the rules do number read like rules at all. numberes have
been appended to the rules which are number rules proper and
r. 29 says
all matters number dealt with in these rules may
be submitted to the member-incharge. companymerce
and industry department for decision. the existence of such a rule seems to obliterate the
frontiers between legislative judicial and executive
exercise of the power of a state such as we understand it. there being numberinvariable use of a clear-cut legislative
language each general order emanating from the sovereign
ruler and promulgated in the same manner as any other rule
and having its roots in a resolution of the cabinet must be
regarded as one binding upon the subject.


civil appellate jurisdiction civil appeals number. 1152
1153 1268 1708 1733 2539 of 1969.
from the judgment and decree dated the 23rd january
1968 of the andhra pradesh high companyrt in a.a.o. number. 210 and
374/67. c. bhandare a. v. rangam and a. subhashini for the
appellant  in c.as. number. 1152-1153  respondent number 2  in

a. 1709/69 . d. bal and p. p. rao for the appellants  in c.as. 1268 and 1733  and respondents number. 11  in c.a. number 1152
11 and 12  in 1153  . s v. gupte a. adil and k. j. john for the appellants
 in c.as. 1708 2539 and respondents 2-10 in c.as. 1152-
1153 and for respondents 1-9 in c.a. 1268/69 . a . v. v. nair for the respondent number 11 in c.a. 1733.
the judgment of the companyrt was delivered by
ray c. j.- these six appeals are by certificate from
the judgment dated 23 january 1968 of the high companyrt of
andhra pradesh at hyderabad in c.m.a. number 210 and 374 of
1967 in that high companyrt. two questions arise for decision in these appeals. first whether in the circumstances of the case there was
any property of the hyderabad companyperative companymercial
corporation limited hereinafter referred to as the companyoperative
society. which companyld be attached by the decree holders- the
appellants in civil appeal number 1708 of 1969 and civil appeal
number 2539 of 1969 in the hands of the director of civil
supplies. second whether the dissolution of - the hyderabad
cooperative companymercial companyporation limited by the registrar of
co-operative societies was companypetent. syed mohiuddin khadri hereinafter referred to as the
decree holder obtained on 24 august 1959 a decree from the
city civil companyrt hyderabad against the companyoperative society
for a sum of rs. 691293 11 ps. with interest. on 23 numberember 1959 the decree holder filed an
execution- petition before the city civil companyrt against the
co-operative society for attachment inter alia of a sum of
rs. 450000/- belonging to the companyoperative society and in
the custody of the companymissioner of civil supplies and the
accountant general hyderabad. on 27 numberember 1959 the
city civil companyrt issued a prohibitory order to the
commissioner of civil supplies to hold the said sum until
further orders. pursuant to the order on 2 december
1959 the accountant general wrote to the companymissioner of
civil supplies that in view of the order of the companyrt no
payment relating to the companyoperative society would be made
by his office without the companycurrence of the companyrt. the
decree holder companytends that the attachment is valid. the
state companytends that there was numberdebt due to the company
operative society and therefore there was numbervalid
attachment. the facts and circumstances under which the city civil
court made an order for attachment are these. the state
budget for 1959-60 provides for payment of rs. 450000/- to
the companyoperative society. in the execution application the
decree holder stated that the sum of rs. 450000/-
mentioned in the budget was a debt due to the companyoperative
society. the decree holder further alleged that the sum of
rs. 450000/- belonging to the companyoperative society was in
the custody and companytrol of the companymissioner of civil
supplies and the accountant general hyderabad as evidenced
by the budget provision and a letter dated 12 june 1959
issued by the companymissioner of civil supplies to the district
treasury officers. the letter dated 12 june 1989 written by
the assistant chief accounts officer and approved by the
commissioner and addressed to district treasury officers
stated that the fol lowing provisions for the civil
supplies department are made under the above major head
 meaning thereby trading civil supplies  in the budget
estimates for the year 1959-60  1  payment to hyderabad company
operative companymercial companyporation-rs. 450000/  you are
requested to kindly make the payments under the above heads
as per rules and intimate to this office the full
particulars of the amounts and expenditure incurred in your
district every fortnight on the 5th and 20th of the
succeeding month to which they relate for watching the
expenditure as a whole against the above provision. the city civil companyrt on these facts issued a
prohibitory order on 27 numberember 1959 directing the
commissioner of civil supplies to hold the sum until further
orders. the accountant general pursuant to the said
prohibitory order wrote to the companyrt on 2 december 1959
that numberpayment relating to the companyoperative society would
be made by his office without the companycurrence of the companyrt. the high companyrt held that the mere fact that the
commissioner of civil supplies directed the treasury officer
to make payments to the companyoperative society as and when
occasion arose did number mean that the amount as a whole
became the property of the companyoperative society in the hands
of the disbursing officer namely the companymissioner of civil
supplies. the high companyrt held that the provisions of order
21 rule 52 of the companye of civil procedure did number apply and
the attachment affected and the prohibitory order made by
the city civil companyrt and the directions to deposit the
amount were number valid. it may be stated here that the state filed a suit c. s.
number 1 of 1962 under order 21 rule 63 of the companye of civil
procedure challenging the order of attachment. the suit was
withdrawn by the government. the high companyrt held that the
withdrawal of the suit did number preclude the government from
questioning the validity of the attachment. on behalf of the state it was companytended that the
budget appropriation of rs. 450000/- for the financial
year 1959-60 did number make the sum the property of the company
operative society in the custody of the public officer. it
was also companytended by the state that the said sum was number a
debt due to the companyoperative society. the state also
contended that the rules require claim being made bill
being processed scrutinity as to whether there is
sufficient fund credited to the appropriation for payment
and in the present case there was numberorder for actual
payment. anumberher companytention on behalf of the state was that
even if the attachment was legal it would cease to be so by
the end of the financial year because the property was number
brought into companyrt and the amount lapsed. the documents in the present case and in particular the
letter dated 12 june 1959 and the letter dated 2 december
1959 written by the accountant general to the companyrt
establish that there was a debt due to the companyoperative
society and the attachment was validly made. the letter
dated 12 june 1959 provided for payment and the payment was
approved by the companymissioner. the officers disbursing the
amount were to pay in accordance with the rules and inform
the department about the expenditure incurred in that
behalf. there is intrinsic evidence in the letter dated 12
june 1959 that the approval by the companymissioner is number only
sanction of the payment but also approval of the same. payment in accordance with rules means that documents are to
be
vouched and there should be particulars of payment and
identification of the persons to whom payment is to be made. the letter dated 2 december 1959 written by the
accountant general to the companyrt is tantamount to the money
being nationally brought to the companyrt. the accountant
general said that the payment was number to be made except with
the companycurrence of the companyrt. thus it came into the companytrol
of and was held on behalf of the companyrt. the amount of rs. 450000/- was number a mere budget provision but the documents
show that the amount had ripened into a debt and an order
for payment to the companyoperative society. the sum of rs. 450000/- was impressed with the character of a debt due to
the companyoperative society and it was validly attached. the companytention on behalf of the state that the amount
was number brought into companyrt and therefore the provision
lapsed is devoid of substance. the letter dated 12 june 1959 provided for payment of
the sum of rs. 450000/-. the letter of the accountant
general dated december 2 1959 indicated that the accountant
general pursuant to the order of the companyrt dated 27
numberember 1959 brought the money to the companyrt. attachment of debts is a process by means of which a
judgment creditor is enabled to reach money due to the
judgment-debtor which is in the hands of a third person. these are garnishee proceedings. to be capable of
attachment there must be in existence at the date when the
attachment becomes operative something which the law
recognises as a debt. so long as there is a debt in
existence it is number necessary that it should be immediately
payable. where any existing debt is payable by future
instalments the garnishee order may be made to become
operative as and when each instalment becomes due. the debt
must be one which the judgment-debtor companyld himself enforce
for his own benefit. a debt is a sum of money which is number
payable or will become payable in the future by reason of a
present obligation  see webb v. stenton 1 . in the present
case the letter dated 12 june 1959 proves that there is an
obligation to pay the specified sum of rs. 450000/- to the
co-operative society. the budget provision fastened on to
the claim of the companyoperative society against the state and
it ripened into a debt payable to the companyoperative society. therefore in the circumstances the attachment levied by he
city civil companyrt was perfected by bringing money to the
court. the second question which falls for determination is
whether the dissolution of the companyoperative society by the
registrar of companyoperative societies was companypetent. the state
registrar of companyoperative societies on 6 september 1960
cancelled the registration of the companyoperative society under
section 53 of the hyderabad companyoperative societies act 1952
and appointed a liquidator. the decree-holder filed writ
petition number 763 of 1960 on 2 numberember 1960 before the high
court and impugned the validity of the order of liquidation. the high companyrt on 19 september 1961 dismissed the writ
petition and upheld the order of liquidation. though the high companyrt dismissed the writ petition the
high companyrt had to deal with the question of liquidation of
the companyoperative society in c.m.a. number 210 of 1967 and

m.a. number 374 of 1967. these two out of the order of the
city civil companyrt dated 11 july 1967 in the decree-holders
execution petition number 95 of 1959. the city civil companyrt held
that the judgment of the high companyrt upholding the validity
of the order of dissolution and appointment of the
liquidator in writ petition number 763 of 1960 did number prevent
the decree-holder from companytending that the state registrar
had numberjurisdiction to pass the order of liquidation. the
high companyrt in the appeal in c.m.a. number 210 of 1967 and

m.a. number 374 of 1967 held that though the high companyrt had
decided in writ petition number 763 of 1960 upholding the
validity of the liquidation yet the order of liquidation
could number be sustained because the delegation made under
section sb of the multiunit companyoperative societies act 1942
was incompetent. the liquidator in civil appeal number 1268 of 1969 and
civil appeal number1733 of 1969 submitted that the liquidator
was interested only in sustaining the validity of the order
of liquidation. the liquidator is number interested in the
dispute between the state and the decree-holder in regard to
the order of attachment. in order to appreciate the rival companytentions of the
decree-holder and the liquidator on the validity of the
order of liquidation it is necessary to refer to the
provisions of multi-unit companyoperative societies act 1942.
the 1942 act applies to companyoperative societies registered
before the companymencement of the act and also to societies
which became registered after the companymencement of the act of
1942. the companyoperative society was a society registered
before the reorganisation of the states in 1956. as such the
society is a multi-unit society governed by the 1942 act. the decree-holder did number challenge this position. the
contention of the decree-holder is that under section 4 of
the 1942 act the central registrar of companyoperative
societies shall exercise in respect of any companyoperative
society and to the exclusion of state registrar the powers
and functions exercisable by the registrar of companyperative
societies of the state in which such society is registered. section 5b of the 1942 act which speaks of delegation of any
power or authority exercisable by central registrar to be
exercisable by registrar of companyoperative societies of a
state is companytended by the decree holder to exclude the state
registrar from acquiring any power by delegation. the
decree-holder companytended that the power of delegation
contemplated in section sb was companyfined only to matters
mentioned in section 5a of the 1942 act. under the 1942 act multi-unit companyoperative societies
whether registered before or after the companying into force of
the act were governed by the companyoperative societies act of
the states in which they were registered. under the 1942 act
and in particular sections 2 and 3 thereof some powers like
those of inspection audit were given to registrars of other
states where such societies had branches. under section 4 1  of the 1942 act the central
government may if it thinks fit appoint a central
registrar of the companyoperative societies. section 4 2  of the 1942 act provides that the central
registrar of companyoperative societies if appointed shall
exercise in respect of any companyoperative society to which the
1942 act applies to the exclusion of state registrars the
powers and functions exercisable by the registrar of company
operative societies of a state in which such society is
actually registered. the powers which the central registrar
is to exercise under the 1942 act are powers under the company
operative societies act of the state where a particular
society is registered. the powers exercisable by the state
registrar under the companyoperative societies act are by
reference under section 4 2  of the 1942 act incorporated
into the 1942 act and exercisable by the central registrar
where the central registrar is appointed by the central
government. the state registrar was admittedly companypetent to
exercise hl respect of the companyoperative society all powers
under the hyderabad companyoperative societies act 1952
referred to as the 1952 state act. under the 1952 state act
the state registrar had the power to dissolve the
cooperative society and appoint a liquidator. the central government appointed a central registrar of
co operative societies for the first time on 29 december
1956. if the matters had rested there the state registrar
would have been divested of his powers over the society
under the state act as from that date. the matters however
did number rest there. section 5b of the 1942 act empowers the
central government to delegate any power or authority
exercisable by the central registrar under the act to state
registrars and certain other officers by a numberification
published in the official gazette. simultaneously with the
appointment of the central registrar the central government
published a numberification on 29 december 1956 delegating the
powers or authority under the 1942 act in relation to
certain matters including dissolution to the state
registrars and other officers mentioned in the numberification
in respect of societies registered in their respective
states. the registrar of societies andhra pradesh was
specifically mentioned in the numberifications
the result of the numberification was that the powers
under the state act of 1952 of which the state registrar was
divested by the appointment of the central registrar were
immediately restored to him. t is in exercise of these
powers under the state act of 1952 which were restored to
the state registrar that he passed the order of dissolution
of the society and appointed a liquidator on 6 september
1960.
section 5b of the 1942 act empowers the central
government to delegate any power or authority exercisable
by the central registrar of companyoperative societies under
this act  meaning thereby the 1942 act  to the state
registrars and other officers. the language in section 5b of
the 1942 act is plain. there are numberwords of limitation or
reservation. the expression any power or authority
exercisable by the central registrar of companyoperative
societies under this act takes in all powers under the 942
act including those under section 4 2  which are the powers
under the state act embodied by reference in that section. the simultaneous introduction of section 5a and section
5b into the 1942 act in the year 1956 with effect from 1
numberember 1956 point
to the fact that section 5b follows section sa but does number
confine section sb only to matters mentioned in section 5a
of the 1942 act. the companytention on behalf of the decree-
holder that the expression any power or authority
exercisable by the central registrar of companyoperative
societies under this act in section sb means only powers or
authority under section 5a of the act is unsound. section 5a
of the 1942 act is a transitional provision regarding
certain companyperative societies affected by the reorganisation
of states. the provisions companytained in section 5b of the
1942 act do number have any words of restriction in their
application only to section 5a of the 1942 act. on the
contrary the provisions in section 5b of the 1942 act speak
of delegation of power or authority exercisable by the
central registrar under the 1942 act. whatever powers are
exercisable by the central registrar by reason of section
4 2  of the 1942 act are capable of being delegated by
reason of provisions companytained in section sb of the 1942
act. the delegation by the central government of the powers
exercisable by the central registrar to be exercised by the
state registrar is supported by the provision of the 1942
art. the order of delegation being valid the state
registrar was companypetent to dissolve the companyoperative society
by the order dated 6 september 1960.
it is therefore number necessary to express any opinion
as to whether the companytention of the decree-holder
challenging the validity of the order of dissolution of the
co-operative society and appointment of liquidator is barred
by reason of companystructive resjudicata on account of the
dismissal of the writ petition number 763 of 1960 filed by the
decree holder in the high companyrt. for these reasons the judgment of the high companyrt is
set aside. the attachment of the sum of rs. 450000 is
upheld. the order of dissolution of the companyoperative society
and appointment of the liquidator are held to be valid. the high companyrt stated that it will be open to the
decree-holder to take up execution against the government. for the amount due to him from the companyoperative society on
the ground that the government has taken over the entire
assets and liabilities of the companyoperative society. we
affirm that finding of the high companyrt. under the interim order of this companyrt the liquidator
deposited an amount of rs. 90000/-in the companyrt. that amount
was allowed to be withdrawn by the legal representative oil
the decree holder on furnishing bank guarantee. the
liquidator asked for refund of that amount to the liquidator
to enable him to discharge his duties according to law. the decree-holder will prefer the claim on account of
attachment of rs. 450000/ before the liquidator. if in
liquidation it will appear that there are prior claims or
that the decree-holder will be entitled to any rateable
distribution out of rs. 450000/- the liquidator will make
appropriate orders for payment of appropriate amount to the
decree holder. we make it clear that after payment by the liquidator
to the decree-holder whatever amount will remain due to the
decree-holder it will be
open to the decree-holder to take up execution against the
government for the amount due by the companyoperative society on
the ground that the government has taken over entire assets
and liabilities of the companyoperative society subject of
course to such companytentions as the government may have. the appeals filed by the state are dismissed. the decree-holder will be entitled to companyts in these
appeals to be paid by the state. the liquidator will retain
costs out of the assets in his hands. the amount of rs.