TaxTMI 
TaxTMI 
2019 (9) TMI 1495
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....ent was charged for payment of property tax and maintenance tax in respect of the said property for the period prior to his auction purchase payable to the Kolkata Municipal Corporation. Contending, inter alia, that he was not liable to any of such tax or charge levied for the period prior to his sale, the respondent moved this Court with a prayer for issuance of a writ of mandamus directing and/or commending the respondent authorities to set aside and/or rescind and/or cancel and/or recall the letter dated 26th October, 2017 wherein and whereunder the appellant/bank communicated to him that the bank was not liable to any outstanding dues towards the property tax or maintenance charges claimed by the corporation with further writ of mandamus directing the bank authorities to reimburse the amount of Rs. 2,72,745/- paid by the petitioner towards outstanding property to the Kolkata Municipal Corporation with interest coupled with a writ of certiorari and other consequential reliefs. 3 . The learned Single Judge disposed of the said writ application vide order dated 18th January, 2019 quashing the written communication issued by the appellant bank in favour of the respondent. Conseque....
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....d in several subsequent cases, including in U.P. Pollution Control Board v. Kanoria Industrial Ltd. [(2001) 2 SCC 549] and ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. [(2004) 3 SCC 553]. The legal position becomes clear when the decision in Suganmal read with the other decisions of this Court on the issue, referred to below: (i) Normally, a petition under Article 226 of the Constitution of India will not be entertained to enforce a civil liability arising out of a breach of a contract or a tort to pay an amount of money due to the claimants. The aggrieved party will have to agitate the question in a civil suit. But an order for payment of money may be made in a writ proceeding, in enforcement of statutory functions of the State or its officers. (Vide Burmah Construction Co. v. State of Orissa.) (ii) If a right has been infringed-whether a fundamental right or a statutory right-and the aggrieved party comes to the Court for enforcement of the right, it will not be giving complete relief if the Court merely declares the existence of such right or the fact that existing right has been infringed. The High Court, while enforcing fundamental or statuto....
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....remedy under Article 226 of the Constitution will not be denied. (Sanjana M. Wig (Ms) v. Hindustan Petroleum Corpn. Ltd.) We are therefore of the view that reliance upon Suganmal was misplaced, to hold that the writ petition filed by the appellant was not maintainable." 7. Thus, Mr. Mukherjee he contends that a writ petition under Article 226 of the Constitution of India may generally be maintained where the petitioner can demonstrate that there is a breach of statutory duty on the part of the said respondents or its agencies or that any action or inaction of the respondents as a functionary of 'State' within the meaning of the Article 12 of the Constitution of India is amenable to infraction of any constitutional or fundamental right of the petitioner. 8. It is urged by Mr. Mukherjee that the genesis of a writ petition under Article 226 is the interplay between a statutory or constitutional 'right' and 'duty' and its imperative for a writ petitioner to contend and aver with reference to the law inforce, that the respondent has failed to perform a legal obligation thereby affecting the right of the petitioner. 9 . In the instant case the appellant/bank ....
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....Provided that if the sale of such secured asset is being effected by either inviting tenders from the public or by holding public auction, the secured creditor shall cause a public notice in two leading newspapers one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include,- (a) The description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor;" (b) the secured debt for recovery of which the property is to be sold; (c) reserve price, below which the property may not be sold; (d) time and place of public auction or the time after which sale by any other mode shall be completed; (e) depositing earnest money as may be stipulated by the secured creditor; (f) any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property." "9(7) Where the immovable property sold is subject to any encumbrances, the authorised officer may, if he thinks fit, allow the purchaser to deposit with him the money required to discharge the encumbrances and any interest due thereon together wit....
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....encumbrances and claims/dues affecting the property prior to submitting their bid which essentially presupposes a contractual obligation the intending bidders and/or the purchaser to be aware of the encumbrances, claims and dues affecting the property to be factorized in their bid submission. 18. Fourthly, the Section 232 of the Kolkata Municipal Corporation Act also do not imposes any statutory liability upon the seller being the secured creditor/appellant/bank herein to make payment of outstanding municipal rates and taxes. 19. Mr. Kallol Basu, learned Advocate for the writ petitioner/respondent, on the other hand, submits by referring to a judgment in the case of Jayan Kuttichakku vs. Common Man Chitties & Loans (P) Ltd. reported in 2006 SCC online Kerala 615 that the municipal dues is an encumbrance by referring to paragraph 3 and 4 of the said report. 20. Mr. Basu also refers to Section 55(1)(g) of the Transfer of Property Act to argue that it is the responsibility of the seller to pay public charges and rents and discharge all encumbrances. Thus, according to Mr. Basu the appellant/bank ought to have ascertained the outstanding dues and charges in the form of 'encumbra....
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....ion of various provisions of the SARFAESI Act and the said rules, 2002 allowed the writ petition directing the bank and its officers to refund the sell price with interest. 23. In Smt. Rekha Sahu vs. UCO Bank and others reported in similar question came up for consideration before the Division Bench, Allahabad High Court, ((Lucknow Bench). The Court duly considered various precedents and statutory provisions contained in the SARFAESI Act as well as the said rules and held as under:- "For the reasons aforesaid, it is clear that the secured creditor does not enjoy the immunity in respect of his action if it is not bona fide. Chief Manager level officer is chosen because with rich experience and maturity of mind he will be able to take action with due care and caution in view of stringent nature of the provisions of the Act. But in the instant case, the Authorized Officer, who was the Chief Manager level Officer of the reputed bank of our country, prior to publishing the auction notice, did not take care of the encumbrances occurred in the property in question and not mentioned the said encumbrances in the property in the public notice. Furthermore, when the petitioner being bona f....
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.... provisions of Rule 8(7)(a) the notice of sale shall contain the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor. (emphasis supplied by us). 27. According to the appellant/bank, the outstanding municipal dues were unknown to it and therefore, Rule 8(6)(a) is not attracted and the appellant/bank as a secured creditor, had no legal obligation to publish along with public notice inviting sale of immovable secured asset the details of encumbrances not known to the secured creditor. 28. The learned trial judge while arriving at his decision relied on the precedents in AI Champdani Industries Limited (Supra) which held that auction purchaser has no liability for payment of pre-sale municipal tax dues. It was held by the Hon'ble Supreme Court that law imposes no obligation upon the purchaser to enquire into the liabilities other than those which would impede value of property. Since advertisement for auction made no specific stipulation that public dues were to be paid by the purchaser, seller himself is required to pay pre-sale dues under Section 55 (1) (g) and 100 of the Transfer of Properly Act. 29. In the....
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....rned the Bench of Kerala High Court, had the occasion to deliver on the scope of the term 'encumbrance' for 'incumbrance'. Paragraph 4 of the judgment is relevant for our purpose:- "4. "Encumbrance" and "incumbrance" are the same. That term is not defined in the T.P Act. Encumbrance is a legal claim on an estate (see Chambers's Twentieth Century Dictionary). Where the statute under consideration did not define the term "incumbrance", the Apex Court in National Textile Corporation v. State of Maharashtra, (1977) 3 SCC 4, referred to Wharton's Law lexicon to notice "incumbrance" as a claim, lien or liability, attached to property. This is the sense in which the term is ordinarily used. An incumbrance, in this sense, has to be a liability "attached to property"; it must be a burden or liability that runs with the land. It was held by the Supreme Court in State of H.P v. Tarsem Singh, means a burden or charge upon property or a claim or lien upon an estate or on the land and that the word "encumber" means burden of legal liability on property. Therefore, a charge created in terms of S. 100 of the T.P Act is an encumbrance. May be that, going by the second para....
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....e appellant vehemently argues that the appellant- Bank or its officers cannot be fastened with the obligation for alleged nondisclosure of pre-sale municipal tax dues as encumbrance while issuing notice under section 8(6) of the said Rules as the sale was conducted "as is where is" and "as is what is" basis; secondly, property tax dues were not known to the authorized officer; thirdly, even if such encumbrance was disclosed, the purchaser would have been directed to deposit such amount for discharging such encumbrance; and, fourthly, Clause E of the terms of E-auction sale notice imposed equal obligation upon the purchaser to make independent enquiries regarding encumbrances and title of the secured asset. Therefore, after completion of sale process and delivery of possession of the secured asset in favour of the respondent, he cannot claim refund of pre-sale municipal tax dues from the Bank. 37. In V. Sambandan (supra), the auction purchaser participated in an auction sale of secured asset after depositing earnest money in favour of the Bank. But at the time of auction sale, the Bank did not produce title deeds and after documents for inspection by the purchaser. The purchaser, b....