TMI Blog1940 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... y in virtue of the terms of Section 177, Municipalities Act of 1916. Section 177 is in the following terms: All sums due on account of a tax imposed on the annual value of building or lands or of both shall, subject to the prior payment of the land revenue (if any) due to His Majesty thereupon, be a first charge upon such buildings or lands. 2. In respect of arrears of taxes therefore there is conferred upon the Municipal Board by statute a charge upon the property on which the taxes are leviable. The suit has been dismissed against defendants 2 and 3 however for the reason that they have been held to be bona fide purchasers without notice of the charge. It was not disputed that defendants 2 and 3 are bona fide purchasers of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In support of this contention reference was made to a Bench decision of this Court in Indra Narain v. Mohammad Ismail AIR1939All687 . In that case it was held that: As Section 2(d) clearly provides that nothing in the Act shall apply to any transfer in execution of a decree other than so provided in chap. IV it is clear that Section 100 as amended does not refer to auction sales or auction purchasers. 4. In the course of their judgment Bennet and Verma JJ. observe in conclusion: No ruling has been produced by learned Counsel for the appellant to support his claim that his client was protected by Section 100 as amended. The rulings cited are all previous to the amendment of Section 100 and it is not necessary to consider them. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to transfers by auction sale in execution of decrees. The law in our judgment is plain. A bona fide purchaser takes property he buys free of all charges of which he has no notice actual or constructive. He is held to have constructive notice when ordinary prudence and care would have impelled him to undertake an enquiry which would have disclosed the charge. If for instance the charge is created by a registered document then the purchaser would be held to have constructive notice of that charge inasmuch as a prudent purchaser would in ordinary course search the registers before effecting the purchase. There is no register, so far as we know, of arrears of taxes or of charges in respect thereof. It has not been shown that the Municipalit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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