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TMI Blog2014 (9) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... n the premises, no date or other particulars are forthcoming. In the absence of these basic requirements, it was not humanly possible for anyone, including the petitioners, to ascertain the Revenue's charge. Therefore, the petitioners were innocent purchasers without notice of any attachment order in respect of the suit property. - Decided in favour of appellant. - W.P. (C) No. 10316 of 2009 , CM No. 8907 of 2009 - - - Dated:- 14-12-2012 - RAVINDRA BHAT S. AND EASWAR R.V., JJ. For the Appellants : Neil Hildreth and Ms. Shruti Sabharwal For the Respondents : Kailash. K. Ahuja, Government Counsel, for Department of Trade and Taxes, Rakesh Kumar Khanna, Senior Advocate with K.K. Ahuja, Ms. Seema Rao, Harsh Prabhakar, L.K. Bhushan and Anirudh Arun Kumar for Deutsche Bank, Ms. Chaitali Jain for V.K. Tandon, S.K. Chachra and Sanjay Goswami The judgment of the court was delivered by S. RAVINDRA BHAT J.- In the present proceeding under article 226 of the Constitution, appropriate directions are sought quashing the warrant of attachment, and a notice of eviction, in respect of plot No. C-190, Defence Colony ( suit property ). 2. The brief facts of the case are that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The petitioners jointly purchased the said property from the sixth respondent, through his General Power of Attorney Holder Mr. Rajesh Gupta. The terms and conditions of the sale were recorded in two registered sale deeds dated April 26, 2006. These contained a specific representation by the sixth respondent with respect to clear title of the said property and it being free from all liens, mortgages, charges, encumbrances and Government dues. At the time of registration of the sale deeds with the office of Sub-Registrar V, New Delhi, no objection to the registration was made and no encumbrance with respect to the said property, of any kind was disclosed. 5. The petitioners intended to demolish the existing structure and build a new residential house and applied for sanction of building plans on April 4, 2008. However, on April 30, 2008 they found a show-cause notice by the Department of Trade and Taxes pasted on the walls of the suit property. The show-cause notice stated that the said property was attached by the Department by order dated March 9, 2004 on account of failure on part of M/s. Jagannath Dudadhar to pay sales tax demands of ₹ 17,12,06,276 and ₹ 8,67,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he terms and conditions of the sale were recorded in two registered deeds dated April 26, 2006 which contained specific representations from the sixth respondent with respect to the clear title of the said property and the property being free from all liens, mortgages, charges, encumbrances and Government dues. The relevant clause of the sale deeds dated April 26, 2006 is reproduced below: That the vendor hereby further assures the vendee that the said portion of the said property is free from all encumbrances such as prior sale, gift, mortgage, disputes, litigation, acquisition, requisition, attachment in the decree of any court, lien, court injunction, lease, loan, surety, security, stay order, notices, claims, demands, will, trust, exchange, prior agreement to sell, etc., and if it is ever proved otherwise, or if; the whole or any part of the said portion of the said property is ever taken away or goes out from the possession of the vendee on account of any legal defect in the ownership or title of the vendor, then the vendor will be liable and responsible to make good the loss suffered by the vendee and shall keep the vendee saved, harmless and indemnified against all such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived a copy of the warrant of attachment dated March 9, 2004 which was allegedly served upon the Registrar/Sub-Registrar-V, New Delhi. However the records of the Sub-Registrar, New Delhi, do not reflect any such service and therefore at the time of registration of the said property no encumbrances appeared with respect to the said the property. The petitioners urged that on inspection of the records of the Sub-Registrar-V in August 2008, it was discovered that the Sales Tax Department had issued a letter dated November 8, 2007 to the Sub-Registrar-V, stating that the said property was attached by order dated March 9, 2004. Therefore, submit the petitioners, that they did not have any notice of attachment of the said property at the time of purchase, i.e., April 26, 2006. 10. The petitioners submitted that they were bona fide purchasers and were not aware of any encumbrances/attachments on the properties and they believed it to have a clear title. The petitioners took all reasonable steps to ensure that the title was clear however due to lapses on the part of the Department on serving notice to the Sub-Registrar timely they were unable to get the correct picture of the said prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n their favour. This has to be necessarily enquired, and prima facie constituted an acceptance of the fact that they were aware about the attachment. 13. The fifth respondent, the concerned Sub-Registrar No. V, Mehrauli, New Delhi, had filed a short-affidavit on January 19, 2010, in which it was stated that the record kept in his office was checked and that the letter dated March 9, 2004 said to have been issued by the Sales Tax Department could not be traced and was not traceable. The affidavit further states as follows: 4. The answering respondent has gone through the contents of letter dated March 9, 2004, sent by the Sales Tax Department. A bare perusal of the same would indicate that the order/recovery certificate was issued against M/s. Jagannath Dudadhar, 13 KM, Rohtak Road, Shakur Basti, New Delhi, Prop. Shri Jagrit Khaitan for a sum of ₹ 17,20,74,096 for the assessment year 1998-99 recoverable as arrears of land revenue under the Delhi Land Reforms Act, 1954. A bare reading of the said order further would indicate that the same has neither been addressed/endorsed to the office of the answering respondent nor any request/direction has been made/given to the ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed on the attachment notice dated March 9, 2004 is of the office of the Sub-Registrar-V and was in use during any period and the period in question; (3) Name and details of the person who has purportedly signed on the attachment notice dated March 9, 2004. The aforesaid affidavit will be filed after making enquiries and verification from persons who were working in the office of the SubRegistrar-V during the relevant period and on the basis of record. Handwriting/signatures should be verified from the records. Aforesaid affidavit will be filed on or before January 11, 2012. 15. The Divisional Commissioner complied with the court's order and filed an affidavit dated April 16, 2012, which states as follows: Affidavit on behalf of the Divisional Commissioner, Delhi I, Dharmendra, aged about 39 years, Sub-Registrar-V, Old Tehsil Building, Mehrauli, Delhi-110 030, do hereby solemnly affirm and declare as under:- (1) That being the incharge of the Office of the Sub-Registrar-V, Old Tehsil Building, Mehrauli, New Delhi110 030 and as authorised by the Divisional Commissioner, Delhi, I am filing this affidavit before the honourable High Court on behalf of the Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners cannot claim to be new purchasers and cannot say that they were innocent purchasers and claim to defeat the demand of the revenue. It was contended that the precondition for the applicability of section 100 to defeat the statutory charge is that the third party should not be aware. In the present case, the vendor clearly had awareness of the attachment. The warrant was affixed on the premises and notice was even given to the fifth respondent. As a result, the transfer in the petitioners' favour was null and void. 17. The above narrative and discussion reveals that the suit property was originally owned by one Col. Buta Singh, who sold it to the sixth respondent's predecessors-in-interest. Eventually, after their death, the property devolved on him. The materials on record reveal that he is the sole proprietor of the tax-defaulter in question, i.e., M/s. Jagannath Dudadhar. It is also evident that at the time of issuance of attachment order, a garnishee order, concerning the proprietorship's bank accounts was also issued. He had approached the tax authorities, and offered to clear some dues, which resulted in the vacation of the order attaching those bank a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of section 30 of the Indian Registration Act, 1908, from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated: Provided that,- (1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908, and the rules made thereunder, (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act. Explanation II.-Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation III.-A pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property. (2) Every attachment and sale under this section shall be made according to the law in force for the time being for the attachment and sale of movable property in execution of a decree of a civil court. (3) In addition to the particulars mentioned in clauses (a) to (o) of the proviso to section 60 of the Code of Civil Procedure, 1908, articles set apart exclusively for the use of religious worship shall be exempted from attachment and sale under this section. (4) The costs of attachment and sale shall be added to the arrear of land revenue. Provisions of the Punjab Land Revenue Act, 1887 21. Mode of service of notice, order of proclamation, or copy thereof.-A notice, order of proclamation or copy of any such document, issued by a Revenue-officer for service on any person shall be served in the manner provided in the last foregoing section for the service of a summons. 22. Mode of making proclamation.-When a proclamation relating to any land is issued by a Revenue-officer, it shall, in addition to any other mode of publication which may be prescribed in any provisions of this Act, be made by beat of drum or other customary method, and by posting of a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales tax case similar to the present case Deputy Commercial Tax Officer v. R.K. Steels [1998] 108 STC 161 (Mad).. In the present case, firstly, no provision of law has been cited before us that exempts the requirement of notice of the charge for its enforcement against a transferee who had no notice of the same. It remains to be seen, therefore, if in the facts of the present case, the first respondent had notice-actual or constructive of the charge. At the outset, in the advertisement/notice dated March 17, 1992 issued by the Corporation, mention is only made of the sale of the defaulting company's assets and there is no indication, whatsoever, of any sales tax arrears. Further, the bid offer made on behalf of the first respondent on June 5, 1992 specifically excludes any statutory liabilities, including sales tax. This offer was accepted by the Corporation on July 15, 1992. Even at that stage, there was no mention of any sales tax arrears. The sale of the assets took place pursuant to the agreement dated August 12, 1992 in which a specific clause was inserted that the first respondent would be liable to pay all property taxes, other taxes, electricity bills, water taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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