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10. Respondent No. 2 seems to have moved the Talathi and Circle Officer for placing the charge of the dues outstanding against respondent NO. 4 towards the sugarcane purchase tax and arrears of sales tax amounting to Rs. 7,04,10,624/- for the first time vide letter dated 21st February, 2012 (Exh-R1). Mutation Entry No. 1747 showing charge of respondent No. 2 10 wp2220-2017 against the secured lands was certified by the Circle Officer on 15th August, 2012. After certification of that Mutation Entry, the charge of respondent No.4 came to be shown in the 7/12 extracts of the lands of respondent No.4. The sale certificate was registered on 21st November, 2012. The 7/12 extracts of the lands - subject matter of the sale were annexed to the sale certificate. The charge of respondent No. 2 was not shown in the said 7/12 extracts. In the circumstances, the petitioner cannot be attributed with the knowledge or notice, either actual or constructive, of the charge of respondent No. 2 in respect of the amount due and payable from respondent No. 4 towards sugarcane purchase tax and arrears of sales tax when it placed the bid for purchase of the secured assets on 16th February, 2012.

18)] and in Ahmedabad Municipal Corpn. of the City of Ahmedabad v. Haji Abdulgafur Haji Hussenbhai [(1971) 1 SCC 757, 759-61 (paras 3 & 4) : AIR 1971 SC 1201, 1202-04(para 3)] (hereinafter "Ahmedabad Municipal Corpn."). In this connection, we may refer to the latter judgment, which is particularly relevant for the present case.

21. Ahmedabad Municipal Corpn. [(1971) 1 SCC 757, 759-61 (paras 3 & 4) : AIR 1971 SC 1201, 1202-04(para 3)] was a case where a person was in arrears of property tax, due under the Bombay Provincial Municipal Corporation Act, 1949. Consequently, the Municipal Corporation created a charge over the property of the defaulter. However, the property was sold in execution of a mortgage decree. When the Municipal Corporation purported to exercise their charge over the property, the purchaser in court-auction filed a suit for a declaration that he was the owner of the property and that the arrears of municipal taxes due by the transferor were not recoverable from him by proceeding against the property purchased in the auction. In the appeal before this Court, the Municipal Corporation's main argument was that where the local law provided for the creation of a charge against a property for which municipal taxes were due, transferees of such properties were imputed with constructive knowledge of any charge created against the properties that 16 wp2220-2017 they had purchased. This argument was, however, rejected. This Court held that while constructive notice was sufficient to satisfy the requirement of notice in the proviso to Section 100 of the TP Act, whether the transferee had constructive notice of the charge had to be determined on the facts and circumstances of the case. [Ibid., at SCC pp. 765-66 (para 12) : AIR pp. 1207-08(para 8)] In other words, this Court held that there could be no fixed presumption as to the transferee having constructive notice of the charge against the property. In fact, the principle laid down in Ahmedabad Municipal Corpn. [(1971) 1 SCC 757, 759-61 (paras 3 & 4) : AIR 1971 SC 1201, 1202-04(para 3)] has been correctly applied in a sales tax case similar to the present case. [CTO v. R.K. Steels, (1998) 108 STC 161 (Mad)].

17 wp2220-2017 7/12 extracts of the lands - subject matter of the auction sale prior to placing bid in the auction. In the said 7/12 extracts, the charge of Sales Tax Authorities was not reflected. The said 7/12 extracts are the part and parcel of the sale certificate dated 21st November, 2012.

17. It is stated by the petitioner that the Sales Tax Officer had informed respondent No. 3 vide letter dated 6th March, 2012 that there were dues to the tune of Rs.7,04,10,624/- payable from respondent NO. 4 towards sugarcane purchase tax, Bombay sales tax and Central sales tax and asking respondent No. 3 to recover the same on priority basis treating them as a first charge over the sale-proceeds of the property of respondent No. 4. It is the specific case of the petitioner that respondent No. 3 did not inform about the said dues to the petitioner and further respondent No. 3 deliberately replied the letter dated 6th March, 2012 belatedly on 1st/2nd February, 2013. As stated above, the last date for submission of bids was 14th February,2012 and the date of opening thereof was 16th February, 2012. It is, thus, clear that when the auction notice was published and the bids were opened, 18 wp2220-2017 there was no communication by the Sales Tax Authorities made with even respondent NO. 3 about the dues pending against respondent No. 4. Therefore, the communication dated 6th March, 2012 made by the Sales Tax Officer to respondent NO. 3 would not be of any help to respondent No. 2 to show that the petitioner was made aware about the dues standing against respondent No. 4 prior to placing of the bid for purchase of the secured assets of respondent No. 4. Had the said dues been brought to the notice of the petitioner, the petitioner certainly would have thought twice to place the bid for purchasing the secured assets of respondent No. 4 for Rs. 48.51 crores. The petitioner certainly would have considered the bare value of the secured assets to be purchased and the other known charges/encumbrances attached to it. Perhaps, the petitioner would not have placed the bid for Rs. 48.51 crores and reduced it to the extent of the dues of respondent No. 2 payable from respondent No. 4. In the circumstances, it would be clear that the petitioner bonafide proposed to purchase the secured assets of respondent No.4 for valuable consideration without knowledge or notice, either actual or constructive, about the charge of the Sales Tax Authorities. Consequently, in view of the judgment in 19 wp2220-2017 the case of Sherwood Resorts Pvt. Ltd. and another (supra), respondent No. 2 cannot enforce the charge for Rs.7,04,10,624/- as claimed in the impugned communications dated 29th November, 2016 and 23rd January, 2017, against the secured assets purchased by the petitioner from respondent No. 3.