IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR. JUSTICE N.K.SUDHINDRARAO R.F.A.No.95/2011 BETWEEN:
M/s.HINDUSTAN MACHINE TOOLS LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1913, HAVING ITS REGISTERED OFFICE AT NO.59, BELLARY ROAD, BENGALURU-560 032 REPRESENTED BY ITS DEPUTY MANAGER (LEGAL) MR.A.NAGARAJAN ..APPELLANT (BY SRI E CHRISTOPHER, ADVOCATE) AND:
M/s.MALLIGE ESTATES PVT. LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.31 CRESCENT ROAD, BANGALORE -560 001 REPRESENTED BY ITS DIRECTOR DR.A.C.SREERAM ..RESPONDENT (BY SRI M.V.VEDACHALA, ADVOCATE) THIS RFA IS FILED UNDER SECTION 96 READ WITH ORDER XLI RULE 1 OF CPC AGAINST THE JUDGMENT AND DECREE DATED 20.09.2010 PASSED IN O.S.NO.7284/2007 BY THE 42ND ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BANGALORE, PARTLY DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS RFA COMING ON FOR FINAL HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT Appeal is directed against the Judgment and decree dated 20.09.2010 passed by the learned 42nd Additional City Civil and Sessions Judge, Bengaluru, CCH-43, wherein the suit filed by the plaintiff came to be decreed in part against the defendant and defendant was directed to pay an amount of Rs.4,53,054/- together with interest at the rate of 6% p.a. from the date of suit till realization.
2. Being aggrieved by the said Judgment and decree the defendant has come up in appeal.
3. For the sake of convenience the parties are addressed with reference to their rankings as stood before the trial court.
4. The claim of the plaintiff in the suit before the trial court is that the plaintiff purchased property comprising land to the extent of 1.193 acres with constructed portion of 16,100 sq.ft. named as K.G.School building from the defendant-vendor under a registered sale deed dated 08.12.2004 for valuable consideration.
5. Purchase of the said property is not disputed. It is claimed that defendant had covenanted with the plaintiff to clear the arrears of tax till date of execution of the registered sale deed of the schedule property in favour of the plaintiff. It was demanded and compelled to pay an amount of Rs.4,53,054/- by way of tax to the schedule property to Bruhat Bangalore Mahanagara Palike (hereinafter referred to as `BBMP’ for brevity). Accordingly it was paid by the plaintiff and claims in the circumstances defendant became legally liable to pay the said amount of tax that was paid by the plaintiff to the BBMP on 29.08.2005.
6. The defendant entered appearance and denied the claim of plaintiff and contends that earlier the schedule property was coming within Dasarahalli City Municipal Council and thereafter it has come within the territorial jurisdiction of BBMP and that there has been dispute between the defendant and BBMP regarding quantum of tax payable on the schedule property. He further contends that when the demand for tax is not tenable and defendant has raised valid objections and also had gone for legal action in this connection it was in no mood to pay tax if any demanded by the plaintiff to the BBMP.
7. The learned trial Judge considered regarding defendant’s liability to pay the said amount of tax and the right of the plaintiff to recover the same from the defendant. In the course of trial the learned Judge was accommodated with the oral evidence of plaintiff- PW-1 and defendant DW-1 and documentary evidence Exhibits P-1 to P-11 on behalf of plaintiff and Exhibits D-1 to D-6 on behalf of defendant.
8. The documents filed on behalf of the defendants are as under:
Ex.D-1 –Authorisation letter Ex.D-2- Objection Ex.D-3- Acknowledgement Ex.D-4- Reply Ex.D-5- Response Ex.D-6 -Acknowledgement 9. Sri Christopher, learned counsel for defendant/appellant would submit that the plaintiff could not have made the defendant liable regarding payment of tax which the former or otherwise not liable. Learned counsel would submit that the act of the plaintiff tantamount to creation of fresh liability that was originally not on the defendant. Learned counsel would further submit that the defendant has a very good case on merits. But the plaintiff cannot undo what was done by the defendant based on liability.
10. Learned counsel Sri Vedachala for plaintiff/respondent would submit that the defendant cannot escape the liability as the taxes that were paid by the plaintiff formed that amount and part of that liability which was legal and mandatory. Thus, being the owner of the schedule property having purchased the same from the defendant the said property at the risk and interest of plaintiff would have been in jeopardy had the taxes are not paid. Learned counsel would further submit that liability of the defendant was statutory. Non-compliance of the same is penal and also would have amounted to forfeiture of the property.
11. The legal point involved is whether a seller of an immovable property after the sale, still remains to clear statutory fees, charges payable on such property upto the date of sale, in the absence of contract to the contrary.
12. In the circumstances of the case, the following points are amply clear:
(i) The existence of the suit schedule property consisting of land and building i.e., to the extent of 1.193 acres along with super structure consisting of 16,100 sq. ft.
(ii) Sale deed was executed on 08.12.2004 by the defendant in favour of the plaintiff not disputed.
(iii) Sale consideration of Rs.2,12,92,255/-.
(iv)Other formalities of transfer of ownership, delivery of possession are not disputed.
13. The claim of the plaintiff is that the payment of tax that became due on the property that is legally liable to be paid by the defendant. In this connection as per clause 4.6 of the sale deed Ex.P-2 which is relied upon by the plaintiff reads as under:
“That Sellers declare and state that the title to the Schedule Property is clear and marketable and free from all encumbrances and that they have not entered into arrangement/agreement for transferring any rights whatsoever in respect of the Schedule Property to third Party(s) prior to execution of this Sale Deed and they undertake to indemnify the Purchasers against any claim to ownership or title made by any Party (s) or person (s) in respect of the Schedule Property. All taxes / penalties, cesses, assessments, duties, levies or charges to be paid by the Sellers to the State Government or any other Statutory Bodies in respect of the Schedule Property sold to the Purchaser prior to execution of this Sale Deed shall be borne and paid by the Sellers at their cost even if such claims are preferred after registration of the Sale Deed. The Sellers further agree to extend all necessary Co- operation to the Purchasers in the process of transfer of Khatha of the Schedule Property in favour of the Purchasers in all the concerned records of Bangalore Mahanagara Palike and other authorities.”
14. However, learned counsel for defendant disputed the liability on the ground no doubt the taxes upto the date payable by the defendant but not at the quantum agreed by the plaintiff and BBMP to the prejudice of the defendant. Insofar as condition regarding payment of taxes up to the date of sale deed even if it is not agreed by the plaintiff and defendant in the capacity of buyer and seller, it is a statutory duty cast on the seller to pay all such public charges and other incidental charges payable on the schedule property to clear up to the date of sale and such condition is provided under Section 55(1)(g) of Transfer of Property Act which is as under:
Section 55 (1)(g) – Rights and liabilities of buyer and seller (1) The seller is bound -
(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.
15. Learned trial Judge has found that the liability of the plaintiff has to be made good by the defendant. It is further contention of learned counsel for appellant and respondent that upon issuance of notice, the plaintiff had no courtesy to inform the defendant regarding the matter. The tax paid receipts are Exhibits P-3 to P-6 which are filed along with the suit. However learned counsel for plaintiff would submit that it is Ex.P-3 the tax paid receipt for the amount of Rs.4,53,054/- that was paid as arrears of tax in respect of property on 29.08.2005. Insofar as legal notice is concerned it is marked as Ex.P-9 wherein the plaintiff has caused a legal notice issued through their counsel demanding an amount of Rs.4,53,054/-. However no reply is enclosed.
16. In the overall circumstances and context of the case, the matter is stated to be under litigation regarding the quantum that is being challenged before this court in W.P.No.17552/2007 and is stated to have been preferred by the defendant questioning the liability and the same came to be disposed of on 17.12.2007 wherein the appeal came to be allowed and matter was remanded to Administrator of BBMP- second respondent therein for fresh disposal of the matter in accordance with law. It was made up for the plaintiff to pay the admitted tax as per its calculation subject to ultimate determination by the second respondent-Administrator.
17. Learned counsel would further submit that after fresh determination of the tax, the action or matter was challenged before this court in W.P.No.20286/2007 and the same came to be disposed on 30.01.2008 as the demand/order dated 06.03.2007 was not pressed.
18. It is necessary to make a mention that even while disposal of the first W.P.No.17552/2007 this court while remanding the matter had observed that the second respondent was directed to dispose of the matter afresh and in accordance with law. On considering of facts and circumstances of the matter the consequences of non payment of tax would have resulted in action against the property itself.
19. No doubt in case of payment of excess amount of tax, the tax payable who is basically liable to pay and who has paid tax as demanded by the BBMP or that amount of tax paid under protest is entitled for refund. Further in case of non payment of tax it would have led for unwanted scenes and consequences. Even basic liability as urged by the parties in Ex-P-3 and as contemplated under Section 55(1)(g) of Transfer of Property Act the BBMP would be ultimately liable to refund the excess irrespective of the fact whether it is contracted or otherwise as no one can enrich themselves unjustly at the cost of others. In the present case even if the defendant were to pay the tax amount and ultimately if it is proved to be excess it would have option of recovering the same from the BBMP. Till then defendant cannot deny and delay the payment of tax amount as paid by the plaintiff under Ex.P-3 to the BBMP. As such the Judgment and decree passed by the learned trial Judge is neither infirm or illegal nor capricious. I find no reason to interfere with the same.
Appeal is devoid of merits and is liable to be dismissed. Accordingly appeal is dismissed. Judgment and decree dated 20.09.2010 passed in O.S.No.7284/2007 by the 42nd Additional City civil and Sessions Judge, Bengaluru, is confirmed.
Sd/- JUDGE SBN