Contractual undertaking to pay pre-sale arrears prevails over free-from-encumbrances recital in sale deed.

A purchaser who accepted tender terms requiring payment of pre-sale municipal tax and water and sewerage arrears remained bound by that undertaking after the sale was confirmed. The recital in the sale deed that the property was sold free from encumbrances did not override the express contractual terms accepted in the tender. Section 55(1)(g) of the Transfer of Property Act did not assist the purchaser because the contract was to the contrary, and section 69 of the Contract Act was inapplicable on the facts. The arrears were treated as charges attached to the property, so the purchaser was liable and the request to shift the burden to the company in liquidation was rejected.

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Issues: Whether the purchaser of property sold by the official liquidator was liable to clear pre-sale municipal property tax and water and sewerage arrears despite the sale deed reciting that the property was free from encumbrances, and whether the statutory provisions governing transfer of property or reimbursement displaced the purchaser's contractual undertaking in the tender.

Analysis: The tender conditions specifically required the purchaser to pay the arrears of municipal tax, property tax, betterment levy and maintenance after confirmation of sale. The purchaser participated in the sale with notice of the existing arrears and accepted those conditions. The recital in the sale deed that the property was free from encumbrances did not override the prior contractual undertaking contained in the tender. Section 55(1)(g) of the Transfer of Property Act, which imposes an obligation on the seller in the absence of a contract to the contrary, could not assist the purchaser because there was an express contractual arrangement to the contrary. Section 69 of the Contract Act was also inapplicable because the purchaser was not paying a liability for which the vendor alone remained bound under the governing transaction. The arrears were treated as charges attached to the property, and the transferee's liability arose from ownership and from the terms on which the sale was accepted.

Conclusion: The purchaser was held liable to pay the pre-sale statutory arrears, and the applications seeking to shift that burden to the company in liquidation were rejected.

Ratio Decidendi: Where a purchaser accepts tender terms undertaking to discharge statutory arrears, a recital in the sale deed that the property is sold free from encumbrances does not displace that undertaking, and the purchaser remains bound to pay the arrears notwithstanding section 55(1)(g) of the Transfer of Property Act.

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