Statutory charge and bona fide purchaser protection barred enforcement of municipal tax arrears against auction buyers without notice.

A statutory municipal tax charge on immovable property was held unenforceable against auction purchasers who bought without actual or constructive notice, because no public register or effective notice of the arrears was shown and ordinary prudence did not require further inquiry. The court also treated the saving clause in the Transfer of Property Act as general in scope, so the protection for transferees for consideration without notice extended to auction sales in execution of decrees. On that basis, the purchasers took free of the charge, the dismissal of the suit against them was upheld, and the appeal was dismissed with costs.

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Issues: (i) whether the statutory charge for municipal tax arrears could be enforced against auction purchasers who bought the property without notice of the charge; (ii) whether the saving provision in the Transfer of Property Act excluded auction sales in execution of decrees from the operation of the provision protecting transferees for consideration without notice.

Issue (i): whether the statutory charge for municipal tax arrears could be enforced against auction purchasers who bought the property without notice of the charge.

Analysis: A municipal tax arrear created a first charge on the property under the municipal law. The charge could be enforced only against a purchaser who had notice, actual or constructive. A purchaser is charged with constructive notice only where ordinary prudence would require inquiry that would have disclosed the charge. No register of tax arrears or other public notice of the charge was shown, and the municipality had allowed the arrears to remain outstanding for many years without taking effective steps to inform intending purchasers.

Conclusion: The auction purchasers, being bona fide purchasers without notice, took the property free from the municipal charge.

Issue (ii): whether the saving provision in the Transfer of Property Act excluded auction sales in execution of decrees from the operation of the provision protecting transferees for consideration without notice.

Analysis: The saving clause in the Transfer of Property Act was treated as general in its terms and not confined to the specified earlier sections. On that view, the provision protecting transferees for consideration without notice applied even to transfers by auction sale in execution of a decree. The earlier decision relied upon by the appellant was not accepted as controlling in the present reasoning.

Conclusion: The Transfer of Property Act did not exclude auction purchasers in execution sales from the protection against enforcement of a charge when they had no notice of it.

Final Conclusion: The municipal charge could not be enforced against the auction purchasers, and the dismissal of the suit against them was upheld, resulting in dismissal of the appeal with costs.

Ratio Decidendi: A statutory charge on immovable property is not enforceable against a transferee for value without notice, and constructive notice arises only where reasonable inquiry would have disclosed the charge; the saving clause in the Transfer of Property Act is general and does not exclude auction sales in execution of decrees from that protection.

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