Professional Documents
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Judgment
Judgment
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:: V E R S U S ::
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sale deed dated 22.7.1999 by one Mrs.Lalita w/o Diliip Patne. After
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under Section 125 of the City of Nagpur Corporation Act, 1948 was
Tax in relation to the said property was served on her. As per the
the revision was served on her. The said property was regularized
sale deed dated 31.10.2007. Thus, the petitioner along with her
names were also recorded in the PR Card with the City Survey
also purchased adjoining plot No.120 from Dilip Kisanrao Patne who
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neither the petitioner nor her daughter nor her father nor erstwhile
owner received any notice or demand for the Property Tax from the
NMC. In the year 2015-2016, as per the data sheet for the Property
Tax, the Property Tax of the said property was assessed from 2007
which is illegal and contrary to the provisions of law. The NMC had
issued public notice for auction of the said property. The area of the
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petitioner had purchased the said property, the tax assessment was
petitioner contended that the NMC had not issued any notice of
the auction sale. The NMC issued final public notice before
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7.11.2017 framed under Section 466(1) and (2) read with Section
No.47(5) of the MMC Act. As per the Taxation Rules, the auction
purchasers had not paid the balance amount within the time, as
therefore, the only remedy available to the NMC was to proceed for
that the entire process of the auction and the issuance of the Sale
filed their reply and took a stand that the petition filed by the
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recovery of the tax was issued in the year 2015 and the auction was
process was complete within a period of four years and during this
property taxes. The NMC admitted that for recovery of the property
It is the contention of the NMC that as per Rule 1(1) of the Taxation
notice and informed that the said property had been sold and that
she was not aware about the address of the present petitioner. The
petitioner had also not moved to the respondent No.1 for paying the
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dismissed.
came with a defence that the petitioner was not diligent and has
failed to safeguard her legal right and they are bona fide
dismissed.
is the owner of the said property. She purchased the said property
the tax record. Accordingly, her name was entered in the tax
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the petitioner along with her daughter had purchased the said
card, but her name was not entered in the municipal record that is
the tax record. It is also a matter of record that till 2016 neither
any bill nor demand was made to the present petitioner or earlier
owner Mrs.Lalita Patne. For the first time, one data sheet was
issued showing that since 2007 to 2016 the property tax is due from
said Mrs.Lalita Patne and the notice was issued to her. Thereafter,
the said property was attached without issuing any notice to the
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above clauses of the said Standing Orders are not complied with by
the issuing body that is the NMC. He submitted that the auction of
purchased the said property for Rs.86.00 lacs and though the
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depositing the amount made a request to reduce the Sale Price and
respondent No.3 assigning the reason that once sale price was fixed
the NMC would cancel the entire auction process and would publish
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Income Tax Act, 1961, Rules 85 and 86 of Order XXI of the Code of
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Mohanlal Shah and others vs. Sardar Sayed Ahmed Sayed Mahmad
there is no sale at all. The rules do not contemplate that there can
case of State of U.P. and others vs. Swadeshi Polytex Limited and
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Act and the Rules had been observed and in case they had been
provisions threadbare, held that the Act and the Rules prescribed a
case of Balram son of Bhasa Ram vs. Ilam Singh and others,
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before the Court closes on 15th day from the sale of property.
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has to be read with Section 154 and conjoint reading shows that in
NMC failed to comply with the legal provisions and conducted the
by the petitioner. Thus, the auction by the NMC is not only arbitrary
the NMC reiterated the contentions that the NMC complied with the
was not diligent about her rights and not raised objections to any of
tax. Whenever the title of any person primarily liable for the
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deed, but till date she had not moved any application for mutation
provision for final notice to call objections, the NMC published notice
opportunity was given to the petitioner, but she had not availed the
same as the sale was finalized and the Sale Certificate was issued
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purchasers came with a defence that the auction purchasers are the
such nature that the auction sale was liable to be set aside. The
recover taxes.
that the said property that is open plot No.102 which is part of
Patne. After execution of the sale deed, Mrs.Lalita Patne applied for
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from the record during the mutation notice under Section 125 of the
bill demanding the Property Tax after the revision was served on
petitioner along with her daughter became joint owner of the said
258.75m2. Their names were also recorded in the PR Card with the
her father had also purchased adjoining plot No.120 from Dilip
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Cooperative Housing Society and along with her father became the
petitioner and her daughter were also recorded in the PR Card with
upon data sheet which shows that the property tax was due over
tax. The NMC has also not claimed that it had issued any bill or
demand prior to 2007. Thus, it is crystal clear that for the first time
in the year 2015-2016 one data sheet showing the Property Tax is
due from 2007 to 2016 and one notice bearing no date on it were
erstwhile owner Mrs.Lalita Patne had not deposited the said amount
and, therefore, the said property was attached by the NMC and
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proceeding shows that office bearers of the NMC visited the house
of Mrs.Lalita Patne to serve the notice, but it reveals that she is not
further discloses that office bearers of the NMC had taken a search
Mahal, Nagpur and it was disclosed that she had sold the said
property and she was not aware about the address of the present
execute the warrant against the owner, as the owner was not
that notice was not issued to the petitioner though the NMC came to
know that Mrs.Lalita Patne is not owner of the said property but the
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said property.
though the office bearers of the NMC got the knowledge that
Mrs.Lalita Patne is not owner, but the petitioner is the owner of the
Without serving any notice, the auction was held on 15.11.2017 and
calling them to pay the purchase amount within seven days in the
however requested to reduce the sale price. The said request was
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the auction purchasers that once the sale price is fixed and
the NMC reduced the total auction amount of the said property from
amount.
refer the provisions of MMC Act. In the light of the fact that no
notice was issued to the petitioner and the reason assigned thereof
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was the owner as per their records, she had shown her inability to
state the address of the petitioner and the petitioner had also not
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ownership of the said premises. As per Sub section (2) of the said
Sub section (1) of the said Section to give the Commissioner any
Commissioner.
17. Learned counsel for the NMC submitted that in the light
of the Taxation Rules under the MMC Act, the transferors have to
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45 of Taxation Rules under Chapter VIII of the MMC Act which are
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18. Thus, as per Rule 41, when arrears of tax are due and
the bill is served, taxes shall be paid within three months from the
tax shall be paid before the 31st December of each year. Rule 42
attachment. As per the said rule, if a person liable for the payment
of the tax for which a bill is served upon him does not pay the tax
has been served under rule 41 does not within fifteen days from
such service pay the sum demanded or show sufficient cause for
and if no appeal is preferred against the said tax, such sum, with all
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43, if defaulter fails to pay the bill and the warrant is issued under
under sub-rule (2). As per Rule 45 speaks about how the warrant is
in any way, and all persons from taking any benefit from such
unless the tax due, penalty or interest or both, if any, due and
payable together, with the costs of recovery, are paid into the
municipal office within twenty one days. As per Sub-rule (2) of Rule
office and, when the property is land, paying revenue to the State
attachment of auction and sale, which are attached due to the non-
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above said clauses of the Standing Rules are not followed by the
said offer was accepted by the NMC. As per Clause No.11 of the
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amount within seven days. These 20 days are reserved to deal with
amount within seven days, the said property would be declared for
period of twenty days were reserved for dealing with the objections,
purchasers were to deposit the amount within seven days. The said
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deposit the said amount, the NMC issued a letter on 19.3.2018 and
a request to reduce the sale price and to issue the sale certificate.
reason that once sale price was fixed by publication, the same could
per Clause No.18 of the Standing Orders, the NMC would cancel the
the said property. It is further apparent that the NMC, against the
the petitioner. Even, in the light of Section 477 of the MMC Act, no
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Act, is empowered to call for the said information which was not
when office bearers of the NMC visited the house of erstwhile owner
informed that the said property had been sold, but she was not
taken by the NMC to ascertain who was the owner at the time of
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obligatory on the part of the NMC to issue notice. The NMC had not
placed on record to show that they have complied with Sub-rule (2)
Taxation Rules under Chapter VIII of the MMC Act. Also, there is no
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and 5 had not complied with the same. Thus, there is no compliance
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Schedule of the Income Tax Act, 1961 and the provisions under Rule
that the purchaser has to deposit 25% of the total purchase amount
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by the purchaser into Court before the court closes on the fifteenth
preceding rule, that is Rule 85, the deposit may, if the Court thinks
28. Thus, the above said Rule and Clause No.14 of the
offerer is to be forfeited.
crystal clear that the NMC had not complied with the legal
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provisions.
30. The auction purchasers claimed that they are the bona
to show that respondent Nos.3 and 4 are the bona fide purchasers
purchaser would take, his conduct could not be said to be bona fide.
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not will depend on the facts of each case. Good faith implies
honest effort to ascertain the facts upon which the exercise of the
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purchases the property in good faith and for value without notice of
the general rule. The onus of proof of good faith is on the purchaser
decided on the facts of each case. The issue of bona fide purchaser
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purchasers to show that they are bona fide purchasers and hence
they are not coming under the exemption of Section 19(b) of the
Specific Relief Act and hence they are not entitled to the protection
had informed the NMC that she had sold the said property. The
petitioner under the Right to Information Act show that when the
owner of the said property, she specifically informed them that the
said property is sold and she was not aware about the address of
the petitioner. It was for the NMC to avail the provision of Section
477 of the MMC Act which empowers the Commissioner to call for
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was not done by the NMC. Moreover, the NMC has not followed the
the said property and contravened the Rules under the MMC Act and
was served either upon erstwhile owner Mrs.Lalita Patne or upon the
under the said Standing Orders empowering the NMC to extend the
provisions, the said time was extended is not explained by the NMC.
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the part of the NMC is illegal, arbitrary and against the provisions of
law and as such the auction deserves to be quashed and set aside.
NMC.
ORDER
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order as to costs.
Digitally signed
!! BrWankhede !! by BHUSHAN
BHUSHAN RANA
RANA WANKHEDE
WANKHEDE Date:
2022.09.03
13:04:21 +0530
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