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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE SRINIVASAN
J. Velumani
Versus
Chenna Basavan & Others
C.M.S.A. No. 52 of 1988
Decided On :Decided on : 23-09-1991
PROPERTY TAX - LIABILITY - TRANSFER OF PROPERTY - NOTICE TO MUNICIPALITY - EFFECT - COURT AUCTION SALE - JURISDICTION - OWNER NOT IMPLEADED - SALE VOID - DISTRICT MUNICIPALITIES ACT, 1920 - S. 88 - TRANSFER OF PROPERTY ACT, 1882 - SS. 3, 78.
Fact of the Case:
A property was mortgaged to Gurusamy. The mortgagor was adjudged insolvent and the Official Receiver attempted to sell the equity of redemption to Kandasamy, the mortgagor's brother. The sale was not concluded. Gurusamy filed a suit to enforce the mortgage against the mortgagor, his brother, and the mortgagor's minor son. A preliminary decree was passed against the mortgagor's half share of the property. A final decree was passed and the decreeholder himself purchased the property. The minor's half share was sold by his mother and guardian in favor of Krishnasamy, the mortgagor's younger brother. Krishnasamy was adjudged insolvent and the Official Receiver sold the half share to Soundappa. In the meantime, Salem Municipality filed a suit for arrears of property tax against Govindasamy, Kandasamy, Soundappa, and Sampoorna Ammal. Gurusamy, the mortgagee/decreeholder/purchaser, was not impleaded as a party. The suit was decreed and the property was sold in execution of the decree. The property was purchased by S.K. Krishnasamy Chetty, who took delivery of possession. He sold it to A.K.V. Shanmugham, who in turn settled it on the appellant. Gurusamy filed a suit for partition against Kandasamy and Soundappa. A preliminary decree and a final decree were passed. In the final decree proceedings, the western half of the whole property was allotted to the decreeholder. He filed an execution petition for possession. The trial court allowed the petition and the order was confirmed on appeal. The appellant obstructed the execution and delivery proceedings. The decreeholder filed a petition for removal of obstruction, which was allowed by the trial court and confirmed on appeal.
Finding of the Court:
1. The suit filed by the Municipality against the transferor was maintainable and the proceedings, which ended in a decree in the suit and the Court auction sale in execution of the decree were valid and binding not only against Govindasamy, but also against the mortgagee/decreeholder/auction purchaser. 2. The mortgagee/decreeholder/auction purchaser's knowledge of the suit filed by the Municipality and the existence of arrears of property tax did not affect his purchase in court auction. 3. The sale held in execution of the decree in O.S. No. 383 of 1954 was a nullity to the extent of the property purchased by mortgagee/decreeholder and it did not convey any right in the property to K. Krishnasami Chetty, who was the court auction purchaser therein.
Issues: 1. Whether the suit filed by the Municipality against the transferor was maintainable and the proceedings, which ended in a decree in the suit and the Court auction sale in execution of the decree were valid and binding not only against Govindasamy, but also against the mortgagee/decreeholder/auction purchaser? 2. Whether the mortgagee/decreeholder/auction purchaser's knowledge of the suit filed by the Municipality and the existence of arrears of property tax affected his purchase in court auction? 3. Whether the sale held in execution of the decree in O.S. No. 383 of 1954 was a nullity to the extent of the property purchased by mortgagee/decreeholder and it did not convey any right in the property to K. Krishnasami Chetty, who was the court auction purchaser therein?
Ratio Decidendi: 1. Under S. 88 of the District Municipalities Act, the transferor is continuously liable for payment of tax. The Municipality can recover the tax from the transferor in the absence of any notice from him of the transfer and proceed against him and attach his properties for recovery of the tax. If the Municipality wants to enforce the charge over the property, it shall do so only by taking proceedings against the transferee, who has become the owner of the property. 2. The mortgagee/decreeholder/auction purchaser's knowledge of the suit filed by the Municipality and the existence of arrears of property tax did not affect his purchase in court auction because the title required by Gurusamy mortgagee/decreeholder in the court auction held on 25.6.1953 will not be let by his inaction after coming to know the filing of the suit by Municipality. 3. The sale held in execution of the decree in O.S. No. 383 of 1954 was a nullity to the extent of the property purchased by mortgagee/decreeholder and it did not convey any right in the property to K. Krishnasami Chetty, who was the court auction purchaser therein because if an execution proceeding is taken against a property without impleading the owner of the property as a party thereof, the proceedings are null and void and any sale held in such execution is a nullity.
Final Decision: The appeal was dismissed.
This appeal arises out of a claim petition for removal of obstruction filed by the decreeholders in E.A. No. 705 of 1981 in E.P. No. 780 of 1973 in O.S. No. 795 of 1963 on the file of the Principal Subordinate Judge, Salem.
2. The facts in brief are as follows:
The property belonged to one Govindasamy and his son Chandrasekaran. It was mortgaged by Govindasamy to one Gurusamy for Rs. 4,000/-On 10.1.1945. The mortgagor was adjudged as an insolvent in I.P. No. 5 of 1945 and the Official Receiver attempted to sell the equity of redemption to one Kandasamy, who was the brother of the mortgagor. But, the sale was not concluded. The mortgagee filed O.S. No. 227 of 1949 to enforce the mortgage against the mortgagor, his brother, who has purported to purchase from the Official Receiver the equity of redemption and the minor son of the mortgagor, Chandrasekaran. It was held by the Court that the mortgage was not binding on the minors half share. A preliminary decree was passed on 5-9-1950 as against the mortgagors half share of the property. Final decree was passed on 29.6.1951. The decree was executed and the decreeholder himself purchased the property on 25.6.1953.
3. The minors half share was sold by his mother an guardian in favour of the mortgagors younger brother Krishnasamy, on 14.9.1950. He was adjudged insolvent in I.P. No. 49 of 1953 and the Official Receiver sold the half share to one Soundappa on 27.7.1957.
4. In the meanwhile, Salem Municipality had filed the suit in O.S. No. 303 of 1954 for arrears of property tax. The suit was filed against Govindasamy, his brother Kandasamy, Soundappa and Sampoorna Ammal. Gurusamy, mortgagee/decreeholder/purchaser was not impleaded as a party, even though he had purchased the property even before the filing of the suit. The suit was decreed. In E.P. No. 641 of 1962, the property was brought to sale. It was purchased by S.K. Krishnasamy Chetty on 22.12.1962. He took delivery of possession. He sold it to one A.K.V. Shanmugham on 25.3.1968, who in turn settled it on the appellant herein on 12.5.1978. The appellant happens to be the wife of one of sons of Kandasamy.
5. In the meanwhile, Gurusamy, mortgagee/decreeholder/purchaser, filed a suit for partition in O.S. No. 795 of 1963 against Kandasamy and Soundappa. He claimed half share, which was purchased by him in court auction. A preliminary decree was passed on 6.1.1965 and a final decree was passed on 29.6.1968. In the final decree proceedings, western half of the whole property was allotted to the decreeholder. He filed E.P. No. 780 of 1973 for possession. He had brought on record the sons of Kandasamy as respondents 6 to 8. The said petition was allowed and it was challenged by the respondents 6 to 8 in revision. The revision petition was dismissed.
6. Thereafter, the present appellant obstructed the execution and delivery proceedings. The decreeholder filed R.A. No. 705 of. 1981 for removal of obstruction. The trial Court allowed the same. On appeal, the order of the executing court was confirmed. The present appeal is against the said order.
7. Two contentions are raised by learned counsel for the appellant. First is that under S. 88 of the District Municipalities Act, the liability to pay tax shall be fastened not only on the transferor, but also on the transferee. According to learned counsel, the section has cast a duty on the transferor and the transferee to inform the Municipality about the transfer and get mutation of the registry. If they fail to do so, it is open to the Municipality, according to learned counsel, to enforce the charge against the property and bring the property to sale. According to him, in the event of such sale, it will be binding not only on the transferor, but also on the transferee, who failed to inform the Municipality about the change in ownership. Applying the said proposition to the facts of the case, learned counsel submits that in the present case, Govindasamy was the owner, who failed to pa
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