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1978 Supreme(Cal) 49
High Court Of Calcutta
Padma Khastgir
UNION OF INDIA (UOI) - Appellant
Versus
RATANLAL BHAWALKA - Respondent
Suit 1278 Of 1960
Decided On : 01/25/1978
ANINDA MITRA, GOUTAM CHAKRABORTY, Probir Majumdar
Service of notice under Section 7 of the Bengal Public Demands Recovery Act creates a charge on the immovable property of the certificate debtor wherever situated. The transfer of the property by the certificate debtor after the service of the notice is void against any claim enforceable in execution of the certificate.
Headnote:
PUBLIC DEMANDS RECOVERY ACT - CHARGE ON PROPERTY - SECTION 8 - SERVICE OF NOTICE - BONA FIDE PURCHASER - EFFECT OF TRANSFER AFTER SERVICE OF NOTICE - ENFORCEMENT OF CHARGE.
Fact of the Case:
The Union of India filed a suit against the defendants for a declaration that premises No. 41 Radha-madhab Sana Lane, Calcutta stands charged for payment of a sum of Rupees 11,443. 43 and a decree in Form No. 5a of Appendix D under Order 34, Rule 4 of the Civil Procedure Code. The plaintiff's case was that the defendant No. 1 was assessed for income tax and super tax for the assessment year 1947-48 and a certificate under Section 46 (2) of the Indian Income-tax Act was issued for the balance sum of Rs. 11,443. 43. A notice under Section 7 of the Bengal Public Demand Recovery Act was served on the defendant No. 1 on 23rd May, 1951. After the service of the notice, the defendants Nos. 1 and 2 transferred the said premises to the defendant No. 3 on October 1, 1951, who in turn conveyed the same to the defendant No. 4 on January 19, 1952. The defendants Nos. 3 and 4 claimed to be bona fide purchasers for value without notice of the certificate proceedings.
Finding of the Court:
The court held that the service of notice under Section 7 of the Bengal Public Demands Recovery Act created a charge on the immovable property of the certificate debtor wherever situated. The court further held that the transfer of the property by the certificate debtor after the service of the notice was void against any claim enforceable in execution of the certificate. The court also held that the defendants Nos. 3 and 4 were not bona fide purchasers for value without notice as they had not led any evidence to prove the same.
Issues: 1. Does the plaint disclose any cause of action? 2. Was the defendant No. 3 bona fide purchaser for value without notice? 3. To what relief, if any, is the plaintiff entitled?
Ratio Decidendi: The court relied on the provisions of the Bengal Public Demands Recovery Act, 1913, which provides for the recovery of public demands of the State of West Bengal. The court held that the service of notice under Section 7 of the Act creates a charge on the immovable property of the certificate debtor wherever situated. The court further held that the transfer of the property by the certificate debtor after the service of the notice is void against any claim enforceable in execution of the certificate. The court also held that the defendants Nos. 3 and 4 were not bona fide purchasers for value without notice as they had not led any evidence to prove the same.
Final Decision: The court passed a decree in favor of the plaintiff in terms of prayers (c), (d) and (h) of the plaint, which included a declaration that the premises No. 41 Radha-madhab Sana Lane, Calcutta stands charged for payment of a sum of Rupees 11,443. 43 and a decree in Form No. 5a of Appendix D under Order 34, Rule 4 of the Civil Procedure Code.
( 1 ) THIS suit has been filed by Union of India against the defendants for a declaration that premises No. 41 Radha-madhab Sana Lane, Calcutta stands charged for payment of a sum of Rupees 11,443. 43 and a decree in Form No. 5a of Appendix D under Order 34, Rule 4 of the Civil Procedure Code and other consequential reliefs.
( 2 ) THE case of the plaintiff Union of India is that defendant No. 1 Ratanlal Bhawalka was assessed for the assessment year 1947-48 for a sum of Rupees 12,943. 43 on account of income-tax and super-tax. For the said assessment a notice of demand, under the Income-tax was duly issued and served on the defendant No. 1. A sum of Rs. 1,500 only was paid by the defendant No. 1. As a result, certificate under Section 46 (2) of Indian Income-tax Act was issued for the balance sum of Rs. 11,443. 43 whereupon the Certificate Officer duly issued and served upon the defendant No. 1 a notice under Section 7 of the Bengal Public Demand Recovery Act on 23rd May, 1951.
( 3 ) FOR the assessment years 1949-50 and 1950-51 a sum of Rs. 303. 25 and Rs. 138. 19 respectively became due and payable to the plaintiff by the defendant on account of income-tax. Similar notice under Section 29 of the Indian Income-tax Act was issued on the defendant No. 1 and certificate proceedings were started for realisation of the same. The defendant failed and neglected to pay the said sum of rupees to the plaintiff.
( 4 ) THE defendants Nos. 1 and 2 were the owners of premises No. 41 Radha-madhab Saha Lane. Calcutta, After the issue and due service of the notice under Section 7 of the Bengal Public Demand Recovery Act the defendants Nos. 1 and 2 transferred and/or conveyed at Calcutta on October 1, 1951 the said premises to the defendant No. 3, The defendant No. 8 on her turn on January 19, 1952 conveyed and/or transferred the said premises to the defendant No. 4. The case of the plaintiff is that after the service of the notice under Public Demands Recovery Act a charge is created immediately on the said immovable property for repayment of the dues of the plaintiff. It is further the case of the plaintiff that anybody who has acquired the property after the service of the demand notice has taken the property subject to the charge in favour of the plaintiff. as such the present suit has been filed for enforcing the said charge.
( 5 ) THE defendants Nos. 1 and 2 have neither filed written statements nor contested the suit at the time of hearing. Defendants Nos. 3 and 4 filed written Statements mainly taking the point that as the defendant No. 3 was a bona fide purchaser for value without any notice being served under Section 7 of the Bengal Public Demands Recovery Act on the defendant No. 1, she is not bound by the said notice or her interest in the said premises is not affected thereby. The defendant No. 3 on her turn has conveyed the said premises to the defendant No. 4 out of love and natural affection and the defendant No. 4 on his turn has accepted the same in good faith without being aware of any right, claim end title of the plaintiff in respect of the said premises. The defendants Nos. 3 and 4 have also taken the point that as the certificate proceeding was filed and served at Howrah. it was not possible for them to take the notice of the same by making necessary searches being made at Calcutta where the property is situate.
( 6 ) IT is also the case of the defendants Nos. 3 and 4 that the plaintiff has no cause of action against them. After hearing Mr. Gautam Chakraborty, Bar-rister-at-law with Mr. Probir Majumdar Barrister-at-Law appearing for the plaintiff and Mr. Aninda. Mitna, Barrister-at-Law, appearing for the defendants Nos. 4 and 5, the following issues were raised. 1. Does the plaint disclose any cause of action ? 2. Was the defendant No. 3 bona fide purchaser for value without notice? 3. To what relief, if any, is the plaintiff entitled?
( 7 ) THE only witness examined on behalf of the plaintiff was
