HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Harinagar Sugar Mills Ltd. v. M. W. Pradhan
Civil Appeal No. 569 of 1965
[1966] 3 SCR 948 ·
Indian Income-tax Act, 1922: section 46 · Companies Act, 1956: sections 439(1), 434 · Code of Civil Procedure, 1908: Order XL rule 1(d)
Holding and result. The court-appointed receiver could file the winding-up petition, was a creditor, validly demanded payment to the Additional Collector under the income-tax recovery notice, and the company’s non-payment was neglect to pay an undisputed debt; the appeal was dismissed.
Sources & disclosures includedDownload original judgment / order
Three-judge bench; judgment delivered by K. Subba Rao, J. · K. Subba Rao, J. · V. Ramaswami, J. · J. M. Shelat, J.
01 · Facts of the case
The company bought a farm from a joint Hindu family and left Rs.25 lakh unpaid. The Income-tax Officer served a section 46 notice directing the company to pay that amount toward the family’s tax. A receiver appointed in a partition suit demanded payment to the Additional Collector and, after non-payment, obtained leave to petition for winding up.
02 · Discussion by the Hon’ble Court
Order XL’s powers allowed steps needed to realise estate debts, including winding up. The receiver qualified as creditor. Directing payment to the Additional Collector did not invalidate the Companies Act demand because the recovery notice displaced payment to the family. No bona fide dispute justified withholding the admitted purchase-price debt.
Source: Primary judgment: reasoning
03 · Judicial decision
The receiver had authority and standing; the statutory demand was effective; failure to pay the amount to the tax collector was neglect to pay within section 434, and the liability was not bona fide disputed.
Source: Primary judgment: holdings
04 · Outcome / in whose favour
Company’s appeal dismissed with costs.
05 · AKHB REVIEW POINT
AKHB analysis: a tax garnishee or recovery direction can alter the lawful recipient of an admitted debt. In enforcement work, trace the debt, the recovery notice, the receiver’s authority and the governing insolvency or winding-up procedure together.
Source & verification
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Statutory scope
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General legal and tax research only; not legal or tax advice. Verify the complete judgment, governing statutory version and subsequent judicial treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court's holding, and no current-law clearance is claimed.