TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the insolvent had an interest in the property that vested in the official assignee on adjudication and was capable of transmission; (ii) whether the intending purchaser had a valid statutory charge over the property under the Transfer of Property Act; (iii) whether the Government could claim priority for arrears of income-tax over the secured creditor.
Issue (i): Whether the insolvent had an interest in the property that vested in the official assignee on adjudication and was capable of transmission.
Analysis: The lease-cum-sale agreement created more than a bare expectancy. It gave the allottee-lessee a valuable right to obtain a conveyance on fulfilment of the stipulated conditions, while the board had no discretion to refuse sale once those conditions were satisfied. Such a right was treated as property within the insolvency law, falling within the class of beneficial interests and powers over property that vest in the official assignee on adjudication.
Conclusion: The insolvent had an interest in the property and that interest vested in the official assignee.
Issue (ii): Whether the intending purchaser had a valid statutory charge over the property under the Transfer of Property Act.
Analysis: The purchaser had paid a substantial part of the price before completion of sale and did not improperly decline delivery. The statutory scheme confers on a buyer, in such circumstances, a charge on the property for the purchase money paid in anticipation of delivery and for interest. The earlier order recognising that charge had also attained finality.
Conclusion: The intending purchaser had a valid statutory charge over the property and over the sale proceeds.
Issue (iii): Whether the Government could claim priority for arrears of income-tax over the secured creditor.
Analysis: Governmental priority for dues in insolvency operates only against unsecured creditors of equal degree and does not override a secured creditor's lien or charge. Since the purchaser was a secured creditor, the Crown's claim for arrears of income-tax could not displace that security, and the charge attached to the property also followed the sale proceeds.
Conclusion: The Government could not claim priority over the secured creditor.
Final Conclusion: The secured creditor's charge and priority were upheld, and the revenue's claim to override that security failed.
Ratio Decidendi: A valuable contractual right to obtain conveyance under a lease-cum-sale arrangement is property that vests in insolvency, and a buyer who pays purchase money before completion acquires a statutory charge that prevails over governmental priority, which operates only against unsecured creditors.
TaxTMI 
TaxTMI 
