Constructive notice and municipal tax first charge bar auction purchaser from denying enforceable property tax arrears.

Section 177 of the U.P. Municipalities Act, 1916 created a first charge on property for arrears of house and water tax, and that charge was enforceable against the property. The Court applied the principle of constructive notice, holding that an intending auction purchaser could not assume municipal taxes had been paid without enquiry into available municipal records and assessment materials. The municipality was not required to give special intimation at the auction sale, and the purchaser's failure to inspect the records was sufficient to attract constructive notice under the Transfer of Property Act. The charge was therefore enforceable against the auction purchaser.

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Issues: Whether arrears of house and water tax constituted a first charge on the property under the municipal law and whether an auction purchaser was bound by constructive notice of that charge in the absence of enquiry.

Analysis: Section 177 of the U.P. Municipalities Act, 1916 created a first charge on the property for municipal tax arrears. The Court held that the principle of constructive notice applied to such a charge, and that an intending purchaser of municipal property could not assume that taxes had been paid without enquiry. The Court distinguished the view that no notice arose in auction sales and treated the omission to enquire from the municipal records as sufficient to attract constructive notice under the Transfer of Property Act. The availability of municipal records and assessment materials made the charge discoverable, and the municipality was not required to give special intimation at the auction sale.

Conclusion: The auction purchaser was held to have constructive notice of the municipal tax charge, and the municipality was entitled to enforce the charge against the property.

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