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Issues Involved:
1. Applicability of Section 100, Transfer of Property Act, 1882, to court auction sales. 2. Constructive notice of statutory charges under Section 177, Municipalities Act, 1916. Detailed Analysis: 1. Applicability of Section 100, Transfer of Property Act, 1882, to Court Auction Sales The primary issue was whether the proviso to Section 100, T.P. Act, applied to properties purchased at court auction sales. The Municipal Board of Agra claimed that the charge on the property could be enforced against the defendant, an auction purchaser, under Section 177, Municipalities Act, 1916, which states: "All sums due on account of a tax imposed on the annual value of building or lands or of both shall subject to the prior payment of the land revenue (if any) due to His Majesty thereupon, be a first charge upon such buildings or lands." The defendant argued that the proviso to Section 100, T.P. Act, which states, "no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge," applied to him as he was a purchaser for consideration and without notice of the charge. There was a conflict in judicial opinions within the High Court. A Bench in *Indra Narain v. Mohammad Ismail* held that Section 100 did not refer to auction sales or auction purchasers. Conversely, another Bench in *Municipal Board, Cawnpore v. Roop Chand Jain* held that the proviso applied to auction purchasers, thus protecting them from statutory charges if they had no notice. Given this conflict, the matter was referred to a Full Bench for an authoritative decision. The Full Bench needed to determine if the equitable rule in Section 100, T.P. Act, exempting purchasers for consideration without notice from charges, applied to auction sales. 2. Constructive Notice of Statutory Charges under Section 177, Municipalities Act, 1916 The second issue was whether the defendant, who had no actual notice of the charge, could be deemed to have constructive notice of the statutory charge under Section 177, Municipalities Act. The argument was that every purchaser should be aware that unpaid taxes could become charges on the property and should make inquiries from the municipal board. The trial court ruled that the defendant was liable for taxes only for the year he purchased the property. However, the District Judge decreed the claim for the entire period of twelve years. The defendant appealed, arguing that he had no notice of the arrears. The court considered whether the defendant's failure to inquire about potential charges amounted to "willful abstention from an inquiry or search which he ought to have made, or gross negligence," as per Section 3, T.P. Act. The court noted that while English conveyancing practices require such inquiries, Indian practices were less developed. However, the statutory definition of constructive notice in India could still apply. In *Municipal Board, Cawnpore v. Roop Chand Jain*, the court held that notice could not be imputed by construction to the purchaser. However, this view was not universally accepted, and the Oudh Chief Court in *Municipal Board, Lucknow v. Ramji Lal* disagreed, suggesting that purchasers should not presume taxes were paid. The Full Bench was asked to consider whether a purchaser who neglects to make inquiries is guilty of negligence and whether such negligence is mitigated by the municipality's delay in collecting taxes. Conclusion The Full Bench was tasked with resolving two critical questions: 1. Whether Section 100, T.P. Act, applies to charges against properties purchased at court auction sales. 2. Whether a purchaser without actual notice of a statutory charge, who fails to inquire about potential charges, is guilty of constructive notice and whether this negligence is mitigated by the municipality's delay. The court concluded that the municipal tax charge could be enforced against the property irrespective of the owner's identity, emphasizing the statutory nature of the charge. The appeal was dismissed, but no costs were awarded to the Municipal Board due to its negligence in tax collection.
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