B. Suresh Chand vs State of Tamil Nadu

K. Mohan Ram, J.—The above Letters Patent Appeal No. 100 of 1999 is before us on a reference order dated 19.12.2002 made by a

Division Bench consisting of two Learned Judges of this Court. The question referred to the Full Bench for answer is as here-under :

What is the extent a bonafide purchaser for value is bound by the charge for payment of arrears of sales Tax created u/s 24 of the Tamil Nadu

General Sales Tax Act, 1959.

Before the Division Bench, the learned Counsel for the appellant relied upon a decision of the Division Bench of this Court rendered in the case of

Deputy Commercial Tax Officer, Thudiyalu Assessment Circle, Coimbatore and another Vs. R.K. Steels, , to contend that the appellant is a

bonafide purchaser without notice of charge u/s 24(1) of the Tamil Nadu General Sales Tax Act, 1959 (hereinafter referred to as ""the Act"") and

therefore the property purchased by him under a registered sale deed dated 25.09.1977 from the vendors'' who were tax defaulters under the Act

cannot be proceeded against for the recovery of sales tax arrears.

However, the Revenue relied upon the decision of this Court rendered by two Division Benches in the case of Coramandel Indag Products

India Limited v. Commercial Tax Officer and Ors. reported in 1993 (3) M.T.C.R. 81 and in the case of Deputy Commercial Tax Officer v. Azha

Kumari reported in 1985 W.L.R. 240. Having regard to the submissions made by the learned Counsel on either side, the Division Bench reasoned

as here-under and requested the Honourable Chief Justice to constitute a larger Bench. The reasons given by the Division Bench in making the

reference is extracted as here-under :

All these cases dealt with the question as to whether the charge created under the Sales Tax is binding on the bonafide purchaser for value. While

in the first case it was held it does not, in the other two cases it was held that it does. The division Bench which decided the Azha Kumari''s case

and the one that dealt with the case of R.K. Steels referred to the decision of the Supreme Court in the case of The Ahmedabad Municipal

Corporation of the City of Ahmedabad Vs. Haji Abdulgafur Haji Hussenbhai, , but, read the judgement of the Supreme Court differently. The

Division Bench which decided the case of R.K. Steels found fault with the division Bench which decided the case of Asha Kumari and held that it

had erroneously distinguished the ratio laid down by the Supreme Court in the case of The Ahmedabad Municipal Corporation of the City of

Ahmedabad Vs. Haji Abdulgafur Haji Hussenbhai, . Judicial proprietory requires that if there is a disagreement among the two Division Benches it

should be resolved, by a larger Bench. It would have been proper if the Division Bench which decided the case of R.K. Steels had itself referred

the matter to a larger Bench instead of following the course that it did. It has been held by the Supreme Court in more than one case that the Co-

ordinate Benches are bound by the decision of other Co-ordinate Benches and in case of disagreement the proper course is to refer the matter to a

larger Bench.

We, therefore, refer this case for decision by a larger Bench having regard to the conflicting views expressed by two different Division Benches

of this Court with regard to the extent a bonafide purchaser for value is bound by the charge for payment of arrears of sales tax created u/s 24 of

the Tamil Nadu General Sales Tax.

The scope of the reference, in our considered view, is not only that we have to decide the question of law, but also the question as to whether

the appellant is a bonafide purchaser without notice of the charge u/s 24(1) of the Act and as such whether his property cannot be proceeded

against for the recovery of sales tax arrears. To decide that the entire factual matrix of the case has to be set out and the facts are as follows:

''For the sake of convenience, the parties are referred to as per their ranking in the suit''. The case of the plaintiffs is as follows:

(i) The plaintiffs purchased the suit property on 25.09.1977 and are in possession of the same as absolute owners. The second defendant, Deputy

Commercial Tax Officer, Thirupathur, alleging that one T.P. Narayanasamy and his son T.N. Subash are defaulters in the payment of sales tax,

issued a notice on 28.10.1977 to the plaintiffs calling upon them to pay tax arrears of a sum of Rs. 1,01,879.67. The plaintiffs filed a claim

application before the second defendant denying their liability. The second defendant issued an order to the plaintiffs on 11.09.1978 stating that the

sale by the defaulters is not binding on the department and negativing the claim of the plaintiffs. The plaintiffs are bonafide purchasers for value

without notice on any manner of claim by anyone against the same. The plaintiffs have discharged the earlier debts of the transferors which were

prior in point of time over the claim of the department. The claim of the department can only be against the defaulters and their property. T.N.

Subash has no right or interest in the property sold to the plaintiffs. The plaintiffs after issuing notice u/s 80 of the CPC (hereinafter referred to as

the C.P.C."") have filed the suit in O.S. No. 254 of 1978 before the Sub-Court, Thirupathur, to set-aside the order of the second defendant dated

11.09.1978 and to raise the attachment on the schedule mentioned property and for injunction.

The defendants filed a written statement contending that one T.P. Narayanasamy and his son T.N. Subash were the partners of the firm M/s.

Kasthuri and Company, Jinnah Road, Thirupathur, carrying on business in sewing machines, motor cycles and spare parts. For the year 1974-75,

the said firm was assessed to sales tax of Rs. 1,389.15. The order was served on 17.02.1976. The tax was payable on or before 18.03.1976.

Hence the said firm became defaulters on 18.03.1976. For the year 1975-76 the said firm was assessed to sales tax of Rs. 3,862.67. The order

of assessment was passed on 31.01.1977. The firm and its partners became defaulters on 02.03.1977. The said T.P. Narayanasamy and T.N.

Subash were partners of another firm by name S.V. Traders, Kancheepuram. For the year 1973-74, the firm S.V. Traders was assessed to sales

tax of Rs. 11,867/-. It was assessed to another sales tax of Rs. 8,983/-. The order was served on 07.08.1974. For the year 1974-75, the firm

was assessed to sales tax of Rs. 69,846/-. The order was served on 26.11.1976. For the year 1975-76, the firm was assessed to sales tax of Rs.

5,482/-. The order was served on 05.12.1976. The said firm and its partners became defaulters for the said three years.The commercial Tax

Officer, Chengalpet sent a requisition to the second defendant on 21.03.1977 to institute proceedings for the recovery of the sales tax arrears of

Rs. 96,187/- due by S.V. Traders, Kancheepuram.

It is further contended that u/s 24 of the Act if default is made the whole of the amount outstanding on the date of default shall become

immediately due and shall be a charge on the properties of the persons liable to pay the tax. The defaulters are also liable to pay penalty. The

second defendant initiated proceedings under the Tamilnadu Revenue Recovery Act. The suit house was attached and brought to sale after service

of demand notice on the defaulters as required under the Act. The demand notice in Form-I dated 30.07.1977 has been served on the defaulter

T.N. Subash on 04.08.1977. After the receipt of the demand notice the defaulters have executed a sale deed in respect of the said properties in

favour of the plaintiffs in order to defraud the defendants. The sale is not binding on the defendants. A copy of the notice dated 22.07.1978 was

sent to the plaintiffs. The plaintiffs are not personally liable but the property purchased by them is subject to charge and is liable for the said

arrears.The S.V. Traders has been assessed to Sales tax of Rs. 5,793/- for 1976-77. The order of assessment was served on 07.04.1978. The

said T.N. Subash on behalf of S.V. Traders in his letter dated 22.09.1977 addressed to the Secretary, Revenue Department, Government of

Tamilnadu had admitted the arrears of sales tax and requested to pay the amount in instalments. The plaintiffs filed the claim petition on 11.09.1978

before the second defendant, who had in his reply intimated about the charge over the suit property and the arrears of sales tax by the

transferors.The plaintiffs are not bonafide purchasers for value without notice of the defect in title. The plaintiffs were aware of the arrears of sales

tax. The plaintiffs and the defaulters are close friends. The sale deed has been created collusively to defeat and delay the realisation of the sales tax

arrears. The defendant does not admit that any consideration was paid towards the sale deed. The order of attachment was issued by way of

abundant caution. The plaintiffs have not discharged any alleged earlier debts of transfero Rs.

The trial court framed the following issues:

(i) Whether the sale deed in favour of the plaintiffs is true, valid and binding on the defendant?

(ii) Whether charge had been created by operation of law over the suit properties prior to said sale?

(iii) Whether the defendants are not entitled to proceed against the suit properties for recovery of sales tax arrears due by M/s. T.P.

Narayanasamy and his son T.N. Subash?

(iv) Whether there was no valid notice u/s 80 C.P.C?

(v) Whether the valuation of suit and court fee paid are not correct?

(vi) Are the defendants estopped from claiming charge?

(vii) Whether the suit properties are liable for the claim of defendants against M/s. S.V. Traders, Kancheepuram?

(viii) To what relief, if any, are the parties entitled to?

During trial on the side of the plaintiffs, the second plaintiff was examined as P.W.1 and 14 other witnesses were examined as P.Ws. 2 to 15

and Exs.A-1 to A-46 were marked in support of their claim. On the side of the defendants, D.Ws.1 to 8 were examined and Exs.B-1 to B-36

were marked in support of their defence.

The Learned Subordinate Judge on a consideration of the oral and documentary evidence adduced, decreed the suit with costs as prayed for.

Being aggrieved by the judgement and decree passed by the learned Subordinate Judge, the unsuccessful defendants filed A.S. No. 613 of 1984

before this Court. A Learned Single Judge on a careful consideration of the evidence on record, the reasonings of the learned Sub-ordinate Judge

by a detailed judgement, set-aside the judgement and decree and allowed the appeal by judgement and decree dated 28.11.1997. Aggrieved by

that the second plaintiff has filed the above Letters Patent Appeal.

We heard Mr. V. Raghavachary learned Counsel appearing for the appellant and Mr. Srikanth, Special Government Pleader appearing for the

first respondent and Mr. R. Subbiah learned Counsel appearing for the second respondent.

Mr. V. Raghavachary learned Counsel for the appellant submitted that the learned Single Judge without properly considering the oral and

documentary evidence adduced in the case and without considering the reasonings of the trial court has erroneously held that S.V. Traders is a

partnership firm. The learned Counsel submitted that in Ex.A-46 the department itself has referred S.V. Traders as only a proprietory concern and

therefore the finding of the Learned Single Judge based on the representation of T.N. Subash to the Board of Revenue that S.V. Traders is a

partnership firm is erroneous. The learned Counsel further submitted that the assessment of the concern in the books of sales tax authorities is the

determinative factor and not the character of the representation made by T.N. Subash to the Board of Revenue. The learned Counsel further

submitted that T.P. Narayanasamy has nothing to do with S.V. Traders which is a proprietory concern or his son T.N. Subash and the tax arrears

of S.V. Traders has nothing to do with T.P. Narayanasamy. The learned Counsel submitted that simply because T.N. Subash has joined with his

father T.P. Narayanasamy in the execution of Ex.A-1 sale deed, it would not mean that they are the joint owners of the property. The learned

Counsel further submitted that the Learned Single Judge has failed to apply the law laid down in Deputy Commercial Tax Officer, Thudiyalu

Assessment Circle, Coimbatore and another Vs. R.K. Steels, and submitted that the Learned Single Judge ought to have held that the plaintiffs

were bonafide purchasers of the suit property without notice.

The learned Counsel for the appellant submitted that Exs.B-1 and B-2- assessment orders and Exs.B-3 and B-4-demand notices coupled with

the evidence of D.Ws.1 and 2 show that S.V. Traders was only a proprietory concern and the same was described as ''Their. S.V. Traders'' and if

really it was a partnership firm, it would have been described as ''Thiruvalargal. S.V. Traders'' in Exs.B-1 to B-4. He further submitted that the trial

court on consideration of the said documents and the deposition of D.Ws.1 to 8 has clearly recorded a finding that S.V. Traders was only a

proprietory concern, whereas the said oral and documentary evidence has not been properly considered by the Learned Single Judge. He further

submitted that the trial court on a consideration of Ex.B-21 has observed that for the first time S.V. Traders was referred to as Thiruvalargal. S.V.

Traders, 502 Gandhi Road, Kancheepuram, in the letter dated 06.06.1978, whereas the plaintiffs had purchased the property on 25.09.1977 itself

and in all the other documents, demand notices and assessment orders S.V. Traders, Kancheepuram was referred to as Thiru S.V. Traders. He

further submitted that the trial court, on a consideration of Ex.B-26-Form-IX alleged to have been signed by T.N. Subash and T.P. Narayanasamy

submitted by them to the sales tax authorities describing them as partners of M/s. S.V. Traders Kancheepuram, has held that there is no evidence

to show that the signature in Ex.B-26 is that of T.P. Narayanasamy. The learned Counsel further submitted that the trial court has observed that

there is no proof that T.P. Narayanasamy himself signed in Ex.B-26 and the trial court on a comparision of the signatures in Exs.B-14 and B-26

has observed that the signatures differ, but the same have not been considered by the Learned Single Judge.

The learned Counsel further submitted that the plaintiffs being bonafide purchasers without notice are not liable to pay the sales tax arrears of

their vendors and the property cannot be attached and sold for the sales tax arrears of either S.V. Traders, Kancheepuram or Kasthuri and

Company. According to the learned Counsel, the learned Single Judge has not considered the issue whether the plaintiffs are bonafide purchasers

without notice in the light of the law laid down by the Division Bench of this Court reported in 1998 (1) C.T.C. 124 (referred to supra).

Per contra Mr. R.Subbiah learned Counsel for the second respondent submitted that the trial court has placed too much importance on

trivialities and has not properly considered Exs.A-46, B-15, B-24, B-25, B-26, B-27 and B-36, whereas the Learned Single Judge has

considered the said documents elaborately and has come to the right conclusion that S.V. Traders, Kancheepuram was not a proprietory concern

as claimed by the plaintiffs, but it was only a partnership firm of which T.P. Narayanasamy and his son T.N. Subash were partners. The learned

Counsel drew our attention to the following observation made by the Tamilnadu Sales Tax Appellate Tribunal (Main Bench, Madras-1) in Ex.B-

36, which reads as follows:

These details and documentary evidence give support for the existence of the stated partnership.

The learned Counsel further drew our attention to Ex.B-25 dated 01.07.1974 wherein in column-4 both the names of T.N. Subash and T.P.

Narayanasamy have been specifically mentioned as sharers. The learned Counsel further invited out attention to Ex.B-26 dated 01.12.1975 which

is Form-IX, prescribed under Rule 40 of the Tamilnadu General Sales Tax Rules, 1959, wherein T.N. Subash and T.P. Narayanasamy have

declared that they have entered into partnership in regard to the business known as M/s. S.V. Traders, Kancheepuram and the form has been

signed both by T.N. Subash and T.P. Narayanasamy. The learned Counsel submitted that the learned Single Judge has extracted relevant portions

from Exs.A-46, B-25, B-26 and B-36 and discussed threadbare the contents thereof and has rightly come to the conclusion that S.V. Traders,

Kancheepuram was a partnership concern consisting of T.N. Subash and T.P. Narayanasamy as partners. The said finding of the learned Single

Judge being based on documentary evidence is unassailable. The learned Counsel further submitted that the learned Single Judge has clearly

observed that a perusal of the pleadings of both the parties as well as the evidence clearly shows that the plaintiffs were very well aware of the

sales tax arrears from 1973-74 and knowing it fully well they have purchased the property from T.P. Narayanasamy. The learned Counsel further

submitted that the plaint does not contain proper pleadings containing the material facts in respect of their claim that they are bonafide purchasers

without notice of the sales tax arrears of their vendors and in the absence of necessary pleadings they are precluded from letting in any evidence in

that respect and further submitted that any amount of oral evidence in the absence of necessary pleadings cannot be looked into. He further

submitted that since the plaintiffs pleaded that they were bonafide purchasers without notice the initial burden was on them to prove the said plea.

According to the learned Counsel, the plaintiffs have not discharged their burden and whereas the department by overwhelming documentary

evidence has proved that the plaintiffs had knowledge about the sales tax arrears of their vendors. The learned Counsel further submitted that

Ex.A-46 which is an order dated 17.11.1975 passed by the Commissioner for Land Revenue and Commercial Taxes in a batch of revision

petitions filed by the vendors of the plaintiffs, the Commissioner rejected the revision petitions filed by the plaintiffs'' vendors challenging the

assessment orders passed for the assessment year 1974-75 and when Ex.A-46 had been produced by the plaintiffs before the trial court, it is

evident that they had knowledge about the sales tax arrears of M/s. S.V. Traders, Kancheepuram and therefore submitted that the plaintiffs cannot

be construed to be bonafide purchasers without notice.

By placing reliance on the following decisions, the learned Counsel for the second respondent submitted that the defence of purchase without

notice is one which ought to be specifically pleaded and proved by one who pleads so.

(i) Murat Singh Vs. Pheku Singh,

(ii) AIR 1939 Nag 132 (Mt. Renukabai W/o. Sitaramji Wankhade v. Bheosan Hapsaji Junghare and Ors.).

(ii) AIR 1940 163 (Nagpur) .

The learned Counsel for the second respondent further drew our attention to Exs.A-3 and A-7-the reply notice and notice sent by the plaintiffs

respectively and submitted that the plaintiffs had not claimed either in Ex.A-3 or Ex.A-7 that they have no notice about the sales tax arrears of their

vendors. He further invited our attention to the cross examination of P.W.1 wherein he had categorically stated that they did not enquire T.P.

Narayanasamy as to whether there was sales tax arrears. P.W.1 has also stated in his cross examination that he had not enquired either T.P.

Narayanasamy or T.N. Subash about S.V. Trade Rs.

In reply Mr. V. Raghavachary learned Counsel for the appellant submitted that the plaint contains the necessary pleadings and it can be

inferred from the plaint that the plaintiffs have no notice about the sales tax arrears of their vendors and they are bonafide purchasers. The learned

Counsel submitted that there is no need to plead that the plaintiffs made enquires with their vendors regarding their sales tax arrears. The learned

Counsel relied upon the following decisions:

(i) 62 L W 377 (Adinarayana v. Jagannadha Rao).

(ii) AIR 1934 68 (Privy Council) .

(iii) AIR 1929 Patna 300 (Ramdeni Singh and Anr. v. Gumani Raut and Anr.).

(iv) Ram Lakhan Vs. Ram Govind and Others, .

(v) AIR 1984 Pat 277 (Rameshwar Singh v. Hari Narayan Singh and Ors.).

The learned Counsel on either side submitted that the Honourable Supreme court in the decision reported in State of Karnataka and Another

Vs. Shreyas Papers Pvt. Ltd. and Others, has approved the decision of the Division Bench of this Court reported in Deputy Commercial Tax

Officer, Thudiyalu Assessment Circle, Coimbatore and another Vs. R.K. Steels, equivalent to 108 S.T.C. 161 and therefore the law laid down in

1993 (3) M.T.C.R. 8 (referred to supra) and 1985 W.L.R. 240 (referred to supra) is no longer good law.

Now we have to consider the above submissions of the learned Counsel.

(i) In 1985 W.L.R. 240 (referred to supra) the Division Bench has laid down as follows:

If the tax assessed remained unpaid for a period of 21 days after the notice of demand had been served, that charge can be enforced by invoking

the provisions of the Revenue Recovery Act, u/s 24(2) of the Tamil Nadu General Sales Tax Act. Since the learned Judge has not considered the

scope of Section 24(1) but proceeded only on the basis of Section 24(2) we are not inclined to agree with the view expressed by the learned

Judge that arrears of sales tax cannot be recovered from the properties sold by the assessee after a charge has fastened itself on the properties of

the defaulter, on his default in paying the arrears of sales tax within the time stipulated by Section 24(1).

(ii) In 1993 (3) M.T.C.R. 8 (referred to supra), the Division Bench after referring to the decision reported in 1985 W.L.R. 240 (referred to supra)

has observed as follows:

The Division Bench held that as a result of Section 24(1) of the Act, a charge was created over the properties for the sales tax amount due by the

transferor even before the transfer was actually effected and the said charge can be enforced against the properties transferred which are in the

hands of the transferee. The decision in The Ahmedabad Municipal Corporation of the City of Ahmedabad Vs. Haji Abdulgafur Haji Hussenbhai,

relied on by the learned Counsel for the appellant is not quite relevant, for, that decision was rendered with reference to Section 141 of the

Bombay Provincial Municipal Corporation Act 1949. Section 141(1) of the Bombay Provincial Municipal Corporation Act 1949 merely creates a

charge for the property tax. There is no provision in the Bombay Provincial Municipal Corporation Act, similar to Section 24(2) of Tamil Nadu

General Sales Tax Act, 1959, providing for enforcement of the charge created u/s 141(1) of the Bombay Provincial Municipal Corporation Act.

Therefore, the ratio of the decision of the Supreme Court in The Ahmedabad Municipal Corporation of the City of Ahmedabad Vs. Haji

Abdulgafur Haji Hussenbhai, cannot be applied to the facts of the present case. We are inclined to follow the decision of the Division Bench of this

Court in Deputy Commercial Tax Officer v. Azha Kumari 1985 W.L.R. 240 and hold that the charge created for arrears of sales tax over the

properties of the defaulter u/s 24(1) of the Act can be enforced in the hands of the transferee by invoking the provisions of the Revenue Recovery

Act as provided in Section 24(2) of the Act.

(iii) In Deputy Commercial Tax Officer, Thudiyalu Assessment Circle, Coimbatore and another Vs. R.K. Steels, , the Division Bench in paragraph

15 observed as follows:

Having regard to the clear and categorical views expressed by the Supreme Court in The Ahmedabad Municipal Corporation of the City of

Ahmedabad Vs. Haji Abdulgafur Haji Hussenbhai, , we are not inclined to accept the two Division Bench judgements of this Court in Dy.

Commercial Tax Officer''s case, 1985 (14) STL 164 and Coramandel Indag Products India Ltd.''s case 1993 (3) M.T.C.R. 8, we would have

normally referred the issue for decision by a Full Bench, but for the fact that the judgement of the Supreme Court is crystal clear. To repeat unless

a provision is made in any statute contrary to the rule of Section 100 of the Transfer of Property Act, a bona fide purchaser for consideration

without notice of the charge is protected. This proposition of law is too very clear and so categorically emphasised by the Supreme Court in The

Ahmedabad Municipal Corporation of the City of Ahmedabad Vs. Haji Abdulgafur Haji Hussenbhai, . We therefore with respect differ from the

views expressed by the two Division Bench judgements referred to above and propose to follow the judgement of the Supreme Court.

and ultimately held as follows:

... following the Supreme Court judgement in The Ahmedabad Municipal Corporation of the City of Ahmedabad Vs. Haji Abdulgafur Haji

Hussenbhai, that the respondent is a bona fide purchaser without notice of the charge u/s 24(2) of the Sales Tax Act and therefore, his property

cannot be proceeded against for the recovery of sales tax arrears.

(iv) In State of Karnataka and Another Vs. Shreyas Papers Pvt. Ltd. and Others, , the Apex Court while considering the enforceability of the

charge created u/s 13(2)(i) of the Karnataka Sales Tax Act 1957 observed as follows: -

While the expression ""charge"" is not defined by the KST Act, this concept is well known in property law and has been defined by Section 100

of the Transfer of Property Act, 1882 (hereinafter ""the TP Act""). Here ""charge"" is defined as:

''100. Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and

the transaction does not amount to a mortgage, the later person is said to have a charge on the property, and all the provisions hereinbefore

contained which apply to a simple mortgage shall, so far as may be, apply to such charge.

Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust, and, save

as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any properly in the hands of a person to

whom such property has been transferred for consideration and without notice of the charge''.

As the section itself unambiguously indicates, a charge may not be enforced against a transferee if she/he has has no notice of the same, unless

by law, the requirement of such notice has been waived. This position has long been accepted by this Court in Dattatreya Shanker Mote v. Anand

Chintaman Datar and in Ahmedabad Municipal Corporation of the City of Ahmedabad v. Haji Abdulgafur Haji Hussenbhai (hereinafter

Ahmedabad Municipal Corpn.""). In this connection, we may refer to the latter judgement, which is particularly relevant for the present case.

Ahmedabad Municipal Corpn. was a case where a person was in arrears of property tax, due under the Bombay Provincial Municipal

Corporation Act, 1949. Consequently, the Municipal Corporation created a charge over the property of the defaulter. However, the property was

sold in execution of a mortgage decree. When the Municipal Corporation purported to exercise their charge over the property, the purchaser in

court-auction filed a suit for a declaration that he was the owner of the property and that the arrears of municipal taxes due by the transferor were

not recoverable from him by proceeding against the property purchased in the auction. In the appeal before this Court, the Municipal

Corporation''s main argument was that where the local law provided for the creation of a charge against a property for which municipal taxes were

due, transferees of such properties were imputed with constructive knowledge of any charge created against the properties that they had

purchased. This argument was, however, rejected. This Court held that while constructive notice was sufficient to satisfy the requirement of notice

in the proviso to Section 100 of the TP Act, whether the transferee had constructive notice of the charge had to be determined on the facts and

circumstances of the case. In other words, this Court held that there could be no fixed presumption as to the transferee having constructive notice

of the charge against the property. In fact, the principle laid down in Ahmedabad Municipal Corpn. has been correctly applied in a sales tax case

similar to the present case.

After laying down the law as aforesaid the Apex Court in the light of the facts of that case held as follows:

In these circumstances, we are of the view that the first respondent was a purchaser for value without notice of the sales tax arrears of the

defaulting company or the consequent charge on the property. This would therefore attract the principle laid down by this Court in Ahmedabad

Municipal Corpn. which is also emboidied in the proviso to Section 100 of the TP Act. Thus, the property in the hands of the first respondent was

free of the charge and it is not open to the appellants to enforce the liabilities of the defaulting company in this manner against the first respondent.

Thus it is clear that the law laid down by the Division Bench in 108 S.T.C. 161 (referred to above) has been approved by the Apex Court.

Therefore we hold that in view of the Honourable Supreme Court''s judgement approving the law laid down in 108 STC 161 (referred to

above) by its decision reported in State of Karnataka and Another Vs. Shreyas Papers Pvt. Ltd. and Others, (referred to above) the law laid

down by the Division Benches of this Court in the decisions reported in 1985 W.L.R. 240 (referred to supra) and 1993 (3) M.T.C.R. 8 (referred

to supra) are no longer good law. We hold that the property purchased by a bonafide purchaser without notice of the charge u/s 24(1) of the Act

cannot be proceeded against for the recovery of sales tax arrea Rs.

Now in the light of the law laid down in State of Karnataka and Another Vs. Shreyas Papers Pvt. Ltd. and Others, we have to see, in the

present case, whether the plaintiffs are bonafide purchasers of the suit property without notice.

To decide the said issue, it will be useful to refer to the relevant provisions of the Act and the Transfer of Property Act.

(i) Sections 19 and 24 of the Act read as follows:

Liability of firms. - (1) Where any firm is liable to pay any tax or other amount under this Act, the firm and each of the partners of the firm shall

be jointly and severally liable for such payment.

(2) Where a partner of a firm liable to pay any tax or any amount under this Act retires, he shall, notwithstanding any contract to the contrary, be

liable to pay the tax or other amount remaining unpaid at the time of his retirement and any tax or other amount due up to the date of retirement,

though unassessed.

Payment and recovery of tax. - (1) Save as otherwise provided for in Sub-section (2) of Section 13, the tax assessed or has become payable

under this Act from a dealer or person and any other amount due from him under this Act shall be paid in such manner and in such instalments, if

any, and within such time as may be specified in the notice of assessment, not being less than twenty-one days from the date of service of the

notice. The tax under Sub-section (2) of Section 13 shall be paid without any notice of demand. In default of such payment the whole of the

amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the person or persons liable to

pay the tax or interest under this Act.

(2) Any tax assessed on or has become payable by, or any other amount due under this Act from a dealer or person and any fee due from him

under this Act, shall, subject to the claim of the Government in respect of land revenue and the claim of the Land Development Bank in regard to

the property mortgaged to it u/s 28(2) of the Tamil Nadu Co-operative Land Development Banks Act, 1934 (Tamil Nadu Act X of 1934), have

priority over all other claims against the property of the said dealer or person and the same may without prejudice to any other mode of collection

be recovered,

(a) as land revenue, or

(b) on application to any Magistrate, by such Magistrate as if it were a fine imposed by him;

Provided that no proceedings for such recovery shall be taken or continued as long as he has, in regard to the payment of such tax, other amount

or fee, as the case may be, complied with an order by any of the authorities to whom the dealer or person has appealed or applied for revision,

under Sections 31, 31-A, 33, 35, 36, 37 or 38.

(ii) With regard to the aspect of notice, the interpretation clause- Section 3 of the Transfer of Property Act 1882 reads as follows:

a person is said to have notice"" of a fact when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he

ought to have made, or gross negligence, he would have known it.

iii) Section 100 of the Transfer of Property Act 1882 reads as follows:

Charges - Where immovable property of one person is by act of parties or operation of law made security for the payment of money to

another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions

hereinbefore contained (which apply to a simple mortgage shall, so far as may be, apply to such charge).

Nothing in this Section applies to the charge of a trustee on the trust-property for expenses properly incurred in the execution of his trust, (and save

as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person

to whom such property has been transferred for consideration and without notice of the charge).

From a reading of the above said provisions the following conclusions emerge:

Under Section 19 of the Act when the firm is liable to pay tax under the Act, the firm and each of the partners of the firm shall be jointly and

separately liable for payment of such tax. Under this Section, for the liability of the firm, the partners are also liable and therefore their properties

cannot escape the tax liability. When such a person has effected transfer of his property after the assessment proceedings under the Act are

completed it cannot be stated that he did not intend to evade the tax and as such the sale will not be binding on the department. But, at the same

time, the legislature has intended to protect the honest person who had purchased the property from such a seller, if he had not colluded with the

seller and he had no notice of the liability of the vendor. While Sub-section (1) of Section 24 creates a ''charge'' on the properties of a defaulter to

the extent of his dues, Sub-section (2) states that the dues will have priority over all other claims against those properties, except land revenue and

claims of Land Development Bank in regard to property mortgaged to it.

The meaning of the term ""charge on the property"" is to be found in Section 100 of the Transfer of Property Act, in which it has been equated

to a ''simple mortgage'', and it has also been laid down therein that, in the absence of a specific provision in any law, no charge shall be enforced

against any property in the hands of a person to whom such property has been transferred for consideration and without notice of a charge. Thus,

while Section 24(1) of the Act gives the tax dues only the status of a simple mortgage over the properties of the defaulter, Section 24(2) gives

these dues a priority over all other claims against that property except claims for land revenue and of Land Development Bank.

A reading of Section 3 of the Transfer of Property Act, 1882 leads to the conclusion that, not only a wilful abstention from an enquiry which a

person ought to have made, but the gross negligence to make enquiry also would amount to notice of a fact to him. When the prudence of a person

requires him to make an enquiry, but due to his own negligence he failed to make enquiry, he falls in the category of a person, with notice. A

purchaser of the property who claims the transaction to be bona fide without notice, the yardstick to be applied for the ""notice"" is given in Section

3 of the Transfer of Property Act, 1882 and only by the application of this provision, a purchaser who seeks protection is to be identified, whether

he is a purchaser for value without notice. The necessity of the purchase, the intention of the transfer, the relationship between the vendee and

vendor are all vital factors to find out the reasonableness of the person in purchasing the property. Sometimes unexplained secrecy or the haste in

the transactions may also throw some light on the bona fides or mala fides. To decide whether a transaction was genuine or bona fide or mala fide,

all facts relating to the conduct of the parties to the transaction have to be weighed as a whole.

The plaintiffs in this case have not disputed the liability of their vendors to pay the sales tax, even at the time of the sales, but claim protection

under the exception clause, for which the parameters of Section 3 of the Transfer of Property Act 1882 have to be applied. Every purchaser from

the assessee is naturally interested to protect the property and will claim to be a bonafide purchaser. For the sake of their claim, the Court cannot

approve the transaction as a bonafide sale.

u/s 101 of the Evidence Act, 1872 whoever desires any court to give judgement as to any legal right or liability depending on the existence of

facts which he asserts, must prove, that those facts existed. Therefore, it is for him to establish that there was no wilful abstention of enquiry or

search of the facts, on his part about the vendor before the sale transaction was completed.

In this context it will be useful to refer to Order 6 Rule 2 of C.P.C., which reads as follows:

Order 6 Rule 2 : Pleading to state material facts and not evidence. - (1) Every pleading shall contain, and contain only, a statement in a concise

form of the material facts on which the party pleading relies for his claim or defence as the case may be, but not the evidence by which they are to

be proved.

A reading of the above provisions show that the party must plead all material facts on which he means to rely at the trial. If any one of the

material fact is omitted, the statement of claim is bad and it would mean no pleading and no cause of auction for the suit. If material facts are not

pleaded, a court cannot permit evidence to be led. In Shri Udhav Singh Vs. Madhav Rao Scindia, the Supreme Court has defined the expression

material facts"" in the following words:

All the primary facts which must be proved at the trial by a party to establish the existence of a cause of auction or his defence are material facts.

The distinction between ""material facts"" and ""particulars"" cannot be overlooked. Material facts are primary and basic facts which must be

pleaded by the party in support of the case set up by him, either to establish his cause of auction or defence. Since the object and purpose is to

enable the opposite party to know the case he has to meet, in absence of pleading a party cannot be allowed to lead evidence. Failure to state

even a single material fact, hence, will entail dismissal of the suit. Particulars, on the other hand, are the details of the case. They amplify, refine and

embellish material facts. They give the finishing touch to the basic contours of a picture already drawn so as to make it full, more clear and more

informative.

If in the light of the provisions contained in Order 6 Rule 2(1) of C.P.C. the averments in the plaint are considered, it can easily be seen that all

the primary facts which must be proved at the trial by the plaintiffs to establish their case that they are bonafide purchasers for value without notice

have not been stated in the plaint. It is pertinent to point out at this juncture that nowhere in the plaint the plaintiffs pleaded that S.V. Traders,

Kancheepuram was a proprietory concern and it was not a partnership firm. Likewise nowhere in the plaint it has been stated that the plaintiffs

either enquired with their vendors or with the authorities of the sales tax department as to whether any sales tax arrears is due from their vendo Rs.

In the written statement the defendants have put forth the following pleas, viz.,:

(i) Thiru. T.P. Narayanasamy and his son T.N. Subash were partners of another firm named S.V. Traders dealing business in moped scooters and

spare parts at No. 502, Gandhi Road, Kancheepuram. For the year 1973-74 the said firm was assessed to sales tax of Rs. 11,876/- and AST of

Rs. 8,983/-. For the year 1974-75 the said firm was assessed to sales tax of Rs. 69,846/- and for the year 1975-76 the said firm was assessed to

sales tax of Rs. 5,482/-. Due to failure to pay the said amounts, the said firm and its partners became defaulters on 05.09.1974, 24.12.1976 and

03.01.1977 for the said three years respectively.

(ii) The defendants have specifically pleaded that after receipt of the demand notice the defaulters namely the vendors of the plaintiffs have

executed a sale deed in respect of the suit property in favour of the plaintiffs, in order to defraud the defendants and the sale deed is not binding on

the defendants.

(iii) The plaintiffs are not bonafide purchasers for value without notice of the defects in title. The plaintiffs were aware of the said arrears of sales

tax. The said Kundanlal Baffna is a close friend to the said defaulters. The sale deed has been created collusively between the plaintiffs and the said

defaulters to defraud the defendants and to defeat and delay the realisation of sales tax arrea Rs.

But the plaintiffs have not chosen to deny the said pleadings in the written statement by filing a reply statement.

At this juncture we should point out that neither in Ex.A-3-reply notice sent by the plaintiffs through their counsel nor in Ex.A-7-legal notice

issued u/s 80 of the C.P.C., the plaintiffs have stated that S.V. Traders, Kancheepuram is a proprietory concern and not a partnership firm or the

plaintiffs made necessary enquiries to ascertain about the sales tax dues of their vendors and inspite of their enquiries they were unable to ascertain

the sales tax liability of their vendo Rs.

Lord Denman, C.J. in the case of William v. Wilcox 1838 (3) A.D. & EI 314 (331) stated as follows:

It is an elementary rule in pleading that, when a state of facts is relied it is enough to allege it simply, without setting out the subordinate facts which

are the means of proving it, or the evidence sustaining the allegation.

If Exs.A-3, A-7 and the pleadings in the plaint are considered in the light of the above said observation of Lord Denman, C.J., we have to point

out that when it is sought to be proved by the plaintiffs that S.V. Traders, Kancheepuram was not a partnership firm but it was only a proprietory

concern and the plaintiffs claim to be bonafide purchasers and without notice the factual foundation for the same or otherwise the primary facts

which must be proved at the trial should have been set out in Exs.A-3 and A-7 and pleaded in the plaint but the plaintiffs have miserably failed to

do so. It is settled law that any amount of oral evidence in the absence of pleadings cannot be looked into.

The learned Counsel for the second respondent relied upon the following decisions viz.:

(i) In Murat Singh Vs. Pheku Singh, , the Division Bench of the Patna High Court has held as follows:

If the defendants wished to avail themselves of the defence that they were purchasers for value without notice, they should have pleaded it.

In the said decision, it is further observed that the defence of a purchase without notice is one which ought to be specifically alleged as well as

proved by one who relies upon it.

(ii) In AIR 1939 Nag 132 (referred to supra) it has been laid down as follows:

Whether the matter falls squarely within Section 100 or whether it comes under a more general rule of law, the burden is on the transferee to

establish that he is the bonafide transferee for value without notice.

(iii) In AIR 1940 163 (Nagpur) the Division Bench affirmed the law laid down in AIR 1939 Nag 132 (referred to supra).

On the basis of the law laid down in the above said three decisions the learned Counsel for the respondents submitted that in the plaint the plaintiffs

have not specifically alleged with material particulars that the plaintiffs were bonafide purchasers without notice and he further submitted that as per

Section 101 of the Evidence Act, burden of proving the same is on the plaintiffs but they have not discharged that burden. The said submissions of

the learned Counsel merit acceptance and as pointed out already by us, the plaint does not contain the primary facts which must be proved at the

trial by the plaintiffs to establish their case that they are bonafide purchasers for value without notice. In the absence of specific pleadings in the

plaint the plaintiffs are precluded from letting in any oral evidence on this aspect.

Now we have to consider the submissions made by the learned Counsel for the appellant on the basis of the following decisions:

(i) In the decision reported in 62 Law Weekly 377 (referred to supra), while considering the question of bonafides of a subsequent purchaser in a

suit for specific performance, it is observed as follows:

On the question whether the fifth defendant is a bona fide purchaser for value without notice, the Courts below have differed, the lower appellate

Court holding that he was not. It lies upon the party seeking to defeat a prior contract for the sale of land to prove that he is a purchaser for value

before judgement bona fide and without notice of the previous contract. The initial burden is upon the purchaser. It may be that very little evidence

on the part of the purchaser is sufficient to discharge the onus in a particular case.

(ii) In the decision reported in AIR 1934 68 (Privy Council) , the Privy Council with reference to Section 27 of the Specific Relief Act (1 of 1877)

has observed as follows:

...the section lays down a general rule that the original contract may be specifically enforced against a subsequent transferee, but allows an

exception to that general rule, not to the transferor, but to the transferee, and, in their Lordships opinion it is clearly for the transferee to establish

the circumstances which, will allow him to retain the benefit of transfer which prima facie, he had no right to get. Further the subsequent transferee

is the person within whose knowledge the facts as to whether he has paid and whether he had notice of the original contract lie, and the provisions

of Sections 103 and 106, Evidence Act, 1872 having a bearing on the question.

(iii) In AIR 1929 Patna 300 (referred to supra) with reference to Section 27 of the Specific Relief Act, it is observed as follows:

It is thus clear that the party who wants to take the advantage of the exception has to prove it. It was, therefore, incumbent upon defendants 2 and

3 to prove in the first instance that they were transferees for value and that they had paid their money in good faith and without notice of the original

contract. This view is supported by the decision of this Court in Dharamdeo Singh v. Ram Prasad Sah 1918 (4) P LW 152 : 44 I.C. 470 where it

was held that in a suit for specific performance of a contract if the plaintiff proves his prior contract, the burden of proving a subsequent bona fide

transfer for value without notice u/s 27(b), Specific Relief Act, lies on the party alleging it. The same view was taken by the Calcutta High Court in

Mahendra Nath Srimani Vs. Secy. of State and Others, . The learned Subordinate Judge was, therefore, right in throwing the onus upon the

defendants to prove that they were transferees for value without notice of the original contract. Very little evidence on the part of the defendants of

want of knowledge of the plaintiff''s contract would have discharged this onus and shifted the onus on the plaintiff but in this case defendant 2 who

gave his evidence does not even say on oath that he was not aware of the plaintiff''s contract.

(iv) In AIR 1984 Pat 277 (referred to supra), it is observed as follows:

In a suit for specific performance of a contract if the plaintiff proves his prior contract, the burden of proving a subsequent bona fide transfer for

value without notice lies on the party alleging it. This is the settled law but it is also well settled that very little evidence, and in certain circumstances

a mere denial, regarding want of knowledge of the plaintiff''s contract would discharge this onus and shift the onus upon the plaintiff

(v) The decision reported in Ram Lakhan Vs. Ram Govind and Others, deals with the scope of Section 19(b) the Specific Relief Act and Section

41 of the Transfer of Property Act, which in our considered view has no relevance to the facts of this case.

In our considered view the above decisions support the contention of the respondents rather than the appellant. Even as per the above

decisions, the initial burden is upon the purchaser and though very little evidence on the part of the purchaser is sufficient to discharge the onus in a

particular case. Whether, in this case, the plaintiffs have let in any evidence to discharge the onus will be considered a little latter.

The learned Counsel for the plaintiffs relied upon the decision of the Apex Court in The Ahmedabad Municipal Corporation of the City of

Ahmedabad Vs. Haji Abdulgafur Haji Hussenbhai, wherein the plea raised by the purchaser that there was bonafide purchase for value was

accepted. But on a thorough reading of the judgement, it could be seen that it is not helpful to the plaintiffs. The case went up to the Supreme

Court on a suit initiated by the court auction purchaser and the court auction purchaser, when threatened by the municipality with a notice of

distress warrant for the arrears of the municipal tax filed the suit for declaration that he was the owner of the property purchased in good faith in the

court sale. The Supreme Court has thoroughly discussed the evidence adduced on both sides and the conduct of the parties to come to a

conclusion that the purchaser had no notice of the charge in the property for the arrears of the municipal tax, that in spite of his best efforts to verify

whether there was any tax due, he was not informed about the arrears and the municipal corporation was not active in recovering the arrears. The

subject-matter of the property in that suit had vested with the official receiver, as the owner became insolvent and the official receiver sought the

permission of the court to pay the tax arrears to the municipal corporation. But subsequently the receiver had stated to the court that he did not

possess sufficient funds to pay the tax to the municipal corporation and sought the direction of the court. The insolvency court also gave certain

directions. The Apex Court has also found from the evidence that the purchaser in fact made enquiries from the receivers about the tax for the

property but the receiver did not give any intimation. Therefore, it was viewed in that case that the purchaser could not have expected that the

receiver, would not have paid tax to the municipal corporation. The Apex Court considering the conduct of the parties with reference to the

prudence or negligence makes the following observation:

Now the circumstances which by a deeming fiction impute notice to a party are based on his wilful abstention to enquire or search, which a person

ought to make or, on his gross negligence. This presumption of notice is commonly known as constructive notice. Though originating in equity this

presumption of notice is now a part of our statute and we have to interpret it as such. Wilful abstention suggests conscious or deliberate abstention

and gross negligence is indicative of a higher degree of neglect. Negligence is ordinarily understood as an omission to take such reasonable care as

under the circumstances it is the duty of a person or ordinary prudence to take. In other words it is an omission to do something which a

reasonable man guided by considerations which normally regulate the conduct of human affairs would do or doing something which normally a

prudent and reasonable man would not do. The question of wilful abstention or gross negligence and, therefore, of constructive notice considered

from this point of view is generally a question of fact or at best mixed question of fact and law depending primarily on the facts and circumstances

of each case and except for cases directly falling within the three explanations, no inflexible rule can be laid down to serve as a straight-jacket

covering all possible contingencies. The question one has to answer in circumstances like the present is not whether the purchaser had the means of

obtaining and might with prudent caution have obtained knowledge of the charge but whether in not doing so he acted with wilful abstention or

gross negligence. Being a question depending on the behaviour of a reasonably prudent man the courts have to consider it in the background of

Indian conditions. Courts in India should, therefore, be careful and cautious in seeking assistance from English precedents which should not be

blindly or too readily followed.

In that case a regular suit was filed by the purchaser himself and the Apex Court has thoroughly considered the entire evidence relating to the

conduct of the purchaser to hold that in spite of his best efforts to find out from the receiver with regard to the tax for the property he could not get

the details from the receiver and therefore he could not be blamed for the non-payment of the tax and he was protected by the proviso to Section

100 of the Transfer of Property Act 1882.

Whereas in this case as pointed out above it is not even pleaded by the plaintiffs that they have made any enquiry regarding the sales tax

arrears of their vendors. It is pertinent to point out that the plaintiffs have not even pleaded in the plaint that they were not aware of the sales tax

arrears payable by S.V. Traders, Kancheepuram and Kasthuri and Company. It is also pertinent to point out that P.W.1 in his evidence has not

even stated that he was not aware of the sales tax arrears due from S.V. Traders, Kancheepuram and Kasthuri and Company, but he has only

deposed that he was not aware that T.P. Narayasamy had to pay sales tax. But unfortunately no such averment has been made in the plaint and

therefore this evidence of P.W.1 cannot be looked into. In this case there is absolutely no evidence on the side of the plaintiffs to discharge the

initial burden. That being so the contention of the learned Counsel for the appellant that the plaintiffs have discharged their initial burden cannot be

accepted. But on the other hand P.W.1 in his cross examination has categorically admitted that he did not enquire T.P. Narayanasamy about the

sales tax arrears. Therefore, the omission on the part of the plaintiffs to enquire with their vendors regarding their sales tax arrears amounts to

negligence on their part and also it will amount to wilful abstention. In this case the plaintiffs had the means of obtaining the necessary information

and the plaintiffs with prudent caution might have obtained knowledge of the charge and therefore the failure on their part to make necessary

enquiries with their vendors will amount to wilful abstention or gross negligence and therefore it could be held that the plaintiffs have constructive

notice.

We have to point out that the fact that the plaintiffs marked Ex.A-46 through D.W.7 will itself show that they had knowledge about the sales

tax arrears of their vendors. It is not the case of the plaintiffs anywhere that Ex.A-46 was obtained by them from their vendors or from some other

source after filing of the suit. Therefore, we have to hold that the plaintiffs are not bonafide purchasers without notice.

Now the issue whether S.V. Traders, Kancheepuram is a partnership firm or a proprietory concern has to be considered. It is pertinent to

point out that D.W.1 through whom Exs.B-1 and B-2 were marked was a last grade Government servant in the office of the Deputy Commercial

Tax Officer. Similarly D.W.2 through whom Exs.B-3 and B-4 were marked was a peon in the Office of the Deputy Commercial Tax Officer,

Kancheepuram. In their cross examination, D.Ws.1 and 2 have stated that T.N. Subash is the owner of S.V. Traders, Kancheepuram and much

reliance has been placed on this by the Trial Court to come to the conclusion that S.V. Traders, Kancheepuram is a proprietory concern. The trial

court ought not to have attached too much importance on such testimony of D.Ws.1 and 2 since both of them are Last Grade Government

Servants, whose services have been utilised by the Deputy Commercial Tax Officer only for the purpose of service of Exs.B-1 to B-4 and they

could not be expected to know about the constitution of S.V. Traders, Kancheepuram. The trial court has observed that there is no evidence to

show that the signature in Ex.B-26 is that of T.P. Narayanasamy and on the face of it it seems to be a fraudulent one and has further observed that

the signature of T.P. Narayanasamy in Exs.B-14 and B-26 differ. In this context it has to be pointed out that the signature of T.N. Subash found in

Ex.B-26 has not been disputed. Similarly the submission of Ex.B-26 to the Sales Tax Department is also not disputed. But the signature of T.P.

Narayanasamy alone is disputed. Even assuming for a moment that T.P. Narayanasamy had not signed in Ex.B-26, the statement contained in

Ex.B-26 cannot be denied by T.N. Subash and as such the above said observations made by the trial court in respect of Ex.B-26 are erroneous.

The plaintiffs themselves contended before the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench, Madras-1) that the firm S.V. Traders,

Kancheepuram was a partnership concern and as evident from Ex.B-36, the tribunal has observed that the details of documentary evidence give

support for the acceptance of the stated partnership. If Ex.B-26 is considered in the light of the contentions put forth by the plaintiffs before the

tribunal, it could be seen that Ex.B-26 is not a fradulent document as observed by the trial Court. Further we also compared the signature of T.P.

Narayanasamy in Ex.B-26 with his admitted signatures in the sale deed-Ex.A-1 to satisfy as to whether the observation made by the trial court has

got any basis. But we are satisfied, on a comparision of the signatures, that there is no variation between the admitted and disputed signatures and

we hold that the signature in Ex.B-26 is that of T.P. Narayasamy only. Therefore, the observation of the trial court regarding Ex.B-26 is erroneous

and without any basis. There is overwhelming evidence available on record to hold that S.V. Traders, Kancheepuram is not a proprietory concern

but it is only a partnership firm consisting of T.P. Narayanasamy and his son T.N. Subash.

The Learned Single Judge after considering at length the contents of Exs.A-46, B-15, B-24, B-25, B-26, B-27 and B-36 has rightly observed

that the conclusion of the trial court that S.V. Traders was proprietory concern cannot be sustained and the trial court failed to consider the

material portions and the documents placed by the defendants in the form of documents. The Learned Single Judge has also rightly observed that a

perusal of the pleadings of both the parties as well as the evidence clearly shows that the plaintiffs were very well aware of the sales tax arrears

from 1973-74 and knowing fully well they have purchased the property from T.P. Narayanasamy. The Learned Judge on a perusal of the entire

oral and documentary evidence has further held that T.P. Narayanasamy and his son T.N. Subash in order to escape from the tax liability after

knowing that there was a default committed by them and a charge has been created as per Section 24 of the Act, with the fraudulent intention sold

the only property in favour of the plaintiffs. Therefore, we see no reason to interfere with the findings recorded by the Learned Single Judge and we

concur with the findings.

In the result, the Letters Patent Appeal fails and the same is dismissed. However, there will be no order as to costs. Consequently, the

connected CMP is closed.