Statutory tax charge and bona fide purchase: encumbrance certificate alone cannot defeat recovery notice without due diligence.

A subsequent purchaser could not defeat an alleged pre-existing statutory tax charge merely by relying on an encumbrance certificate, because the certificate is only one aid to title verification and not a substitute for checking registration records and other due diligence. The plea of bona fide purchase for value without notice depended on surrounding facts, including the timing of the charge and the purchaser's knowledge, and required proof in appropriate proceedings. The writ challenge to the recovery notice therefore failed, and the recovery proceedings were left undisturbed, with the purchaser relegated to seek declaration of bona fide purchase and absence of notice in civil proceedings.

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Issues: Whether the impugned recovery notice could be sustained against a subsequent purchaser who claimed to be a bona fide purchaser for value without notice of the tax charge.

Analysis: The property was already subject to a statutory tax charge created under the sales tax enactments and the Transfer of Property Act principles governing charges. The question whether the purchaser had notice of the charge depended on the surrounding facts, including the timing of the alleged charge, the encumbrance certificates, and the need for due diligence before purchase. The encumbrance certificate was held to be only one aid to a purchaser and not a substitute for physical verification of the registration records. Since a pre-existing charge had been asserted to exist prior to the petitioner's purchase, the plea of bona fide purchase without notice required proof in appropriate proceedings and could not defeat the impugned recovery action in the writ jurisdiction.

Conclusion: The challenge to the recovery notice failed; the writ petition was not maintainable on the asserted plea of bona fide purchase without notice.

Final Conclusion: The recovery proceedings were left undisturbed, while the petitioner was relegated to seek declaration of bona fide purchase and absence of notice in appropriate civil proceedings.

Ratio Decidendi: A subsequent purchaser cannot defeat a statutory tax charge merely by relying on an encumbrance certificate when a pre-existing charge is alleged and the issue of bona fide purchase without notice requires factual determination and proof of due diligence.

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