Indian Kanoon - Search engine for Indian Law

From the plaintiff's testimony it is clear that he did nevertheless make enquiries from the receivers if there were any dues against the property though the enquiry was not made specifically about municipal dues. Apparently he was not informed about the arrears of municipal taxes. This seems to us explainable on the ground that the receivers had, after securing appropriate orders, for some reasons not clear on the record, omitted to pay the arrears of municipal taxes and they were, therefore, reluctant to disclose this lapse on their part. On these facts and circumstances we do not think that the plaintiff could reasonably be fixed with any constructive notice of the arrears of municipal taxes since 1949. So far as the legal position is concerned we are inclined to agree with the reasoning adopted by the Allahabad High Court in Roop Chand Jain's case (supra) in preference to the reasoning of the Full Bench of that Court in Nawal Kishore's case (supra) or of the Division Bench of Oudh Chief Court in Ramji Lal's case (supra). We do not think there is any principle or firm rule of law as suggested in Nawal Kishore's case (supra) imputing to all intending purchasers of property in municipal area where municipal taxes are a charge on the property, constructive knowledge of the existence of such municipal taxes and of the reasonable possibility of those taxes being in arrears. The question of constructive knowledge or notice has to be determined on the facts and circumstances of each case. According to the Full Bench decision in Nawal Kishore's case (supra) also the question of constructive notice is a question of fact and we do not find that the material on the present record justifies that the plaintiff should be fixed with any constructive notice of the arrears of municipal taxes.

17. In other words, the Hon'ble Apex Court, on analysing the ratio laid down in Nawal Kishore's case, was of the view that there cannot be any principle or firm rule of law imputing to all intending purchasers of properties in Municipal areas, where municipal taxes are a charge on the property, with constructive knowledge of the existence of municipal taxes or possibility of such taxes being in arrears. While holding so, the Hon'ble Apex Court held that the question of constructive notice requires to be http://www.judis.nic.in  W.P.Nos.39939 of 2005 & 25145 of 2007, 25830, 30117 & 30118 of 2008, 3211 & 4827 of 2009, 24690 of 2010, 28104 of 2013, 25602, 30458 & 36010 of 2015 and 35988 of 2016 approached from equitable considerations and thereby, found that the charge of the Municipal Corporation for arrears of Municipal taxes is not enforceable against the property of the plaintiff.

20. The aforesaid findings of the Hon'ble Apex Court that the question http://www.judis.nic.in  W.P.Nos.39939 of 2005 & 25145 of 2007, 25830, 30117 & 30118 of 2008, 3211 & 4827 of 2009, 24690 of 2010, 28104 of 2013, 25602, 30458 & 36010 of 2015 and 35988 of 2016 of constructive knowledge or notice has to be determined on the facts and circumstances of each case, is corollary to its earlier finding that there cannot be any principle or firm rule of law, imputing to all intending purchasers of properties in municipal area, where municipal taxes are a charge on the property, and that there cannot be a constructive knowledge on the part of the intending purchasers to the existence of such municipal taxes or the reasonable possibility of those taxes being in arrears.

32. Such a submission cannot be sustained in view of the pronouncement in the Ahmedabad Municipal Corporation's case, wherein it was held that a bonafide purchaser has no constructive knowledge of the local tax arrears and further, failure to enquire with the tax authorities will not amount to willful abstention. If that be the position, the very basis of the submissions that the transferee had constructive notice of the charge fails and therefore, the purchaser would be entitled to seek protection under Section 100 of the TP Act.