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of <h1>Crown's Priority in Debt Payment Upheld by Court, Overturning Full Bench Decision</h1> <h3>The Deputy Commissioner of Police Versus S. Vedantam and Ors.</h3> The Deputy Commissioner of Police Versus S. Vedantam and Ors. - 1936 AIR 132 Mad Issues:Claim based on prerogative right of the Crown to be paid its debt in priority to other creditors disallowed by Full Bench of Small Cause Court.Analysis:1. The petitioner sought revision of the Full Bench's order disallowing a claim based on the Crown's prerogative right to be paid its debt first. The debt in question was arrears of tax due under the Madras Motor Vehicles Taxation Act, clearly a Crown debt. The Full Bench erred in determining it was not a Crown debt. The Crown's right to priority over other creditors is well-established in law, whether the debt is by record or specialty, as seen in previous cases like In re Henley & Co and Commissioner of Taxation v. Palmer.2. The respondent argued that the money paid into court became the decree-holder's and was no longer available to the Crown. Under English law, the Crown's right may be defeated if the subject executes distress before the Crown takes action. However, in India, an attachment under the Civil Procedure Code does not create a charge or secure the creditor. The court, upon notice of the Crown debt, was obligated to recognize the Crown's priority for payment out of the money in court, as established in Gayanoda Bala Dassee v. Butto Kristo.3. The respondent contended that the Motor Vehicles Taxation Act provided methods for debt recovery, suggesting the Crown should use those remedies. However, specific provisions in the Act do not exclude the Crown's prerogative right enforcement through other means, as seen in the case of In re Henley & Co. The Court held that the Crown was entitled to payment of its debt out of the money in court, reversing the lower Court's decision and allowing the petition with costs.This judgment clarifies the Crown's prerogative right to priority in debt payment, even in attachment cases, and emphasizes the obligation of the court to recognize and fulfill this right.
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