ORAL JUDGMENT :- Rule. 2. Pursuant to an order passed by this Court in certain Company petitions, the Official Liquidator was appointed as Liquidator in respect of the business and assets of a Company known as Jayanti Business Machines Ltd. The Official Liquidator is stated to have been in physical possession of the movable and immovable property of the Company. Bank of India was a secured creditor with a claim in excess of Rs. 30.39 crores. By an order dated 27th January, 2005, certain directions were issued by the Learned Company Judge. Bank of India initiated recovery proceedings before the Debts Recovery Tribunal for the recovery of its dues. The Debts Recovery Tribunal ordered that the property of the Company be put to auction and an auction sale was held in pursuance of a public notice and the petitioners were declared as successful purchasers at an auction that was held on 10th May, 2006 at and for a consideration of Rs. 2.77 crores. The petitioners are stated to have paid the sale price and possession of the property was handed over by the Official Liquidator under the directions of the Debts Recovery Tribunal on 17th July, 2006. The Municipal Corporation addressed a communication to the petitioners on 2nd August, 2006 through the Assistant Assessor and Collector, K/E Ward demanding arrears on account of property taxes in the amount of Rs. 89.63 lakhs together with a penalty in the amount of Rs. 1.50 lakhs. That led to the institution of these proceedings under Article 226 of the Constitution. 3. At the hearing of the petition, counsel appearing on behalf of the petitioners has relied upon the judgment of a learned Single Judge of this Court, Hon'ble Mr. Justice F. I. Rebello, delivered on 16th September, 2005 in Anchor Health and Beauty Care Ltd. vs. Municipal Corporation of Greater Mumbai, Writ Petition 1340 of 2005 [since reported in 2006(1) Mh.L.J. 619]. In the case, which arose before the learned Single Judge, an Official Liquidator was appointed as Liquidator of the properties of a Company which was in liquidation. An auction was conducted by the Liquidator at which the first petitioner before the Court came to be declared as successful purchaser. In the case, which arose before the learned Single Judge, an Official Liquidator was appointed as Liquidator of the properties of a Company which was in liquidation. An auction was conducted by the Liquidator at which the first petitioner before the Court came to be declared as successful purchaser. After the property had thus vested in the auction purchaser, the Municipal Corporation issued a warrant of attachment on account of non-payment of property taxes between the period 1st October, 1989 to 31st March, 2003, this being a period prior to the date of the purchase by the successful bidder. In a challenge which was preferred on behalf of the auction purchaser, the Municipal Corporation asserted that under section 212 of the Bombay Municipal Corporation Act, 1888, property taxes due in respect of any building or land are a first charge upon the interest in such land or building of the person liable for such taxes. The learned Single Judge, however, held that section 212 of the Act was of no assistance, relying on the provisions of sections 456, 457, 528, 529 and 530 of the Companies' Act, 1956. The Court held that the Municipal Corporation is not a secured creditor who can stand outside the winding up and would have to file its claim before the Liquidator. Hence, the conclusion that was arrived at was that the purchaser of the property put to an auction sale by the Liquidator of the Company in winding up was not liable to pay taxes prior to its purchase and claims in respect of the period prior to the date of purchase would have to be filed before the Liquidator who would consider the priority of those claims in accordance with law. 4. On behalf of the Municipal Corporation, it has been submitted that the judgment of the learned Single Judge would require reconsideration inasmuch as it overlooked the plain intendment of the provisions of section 212 of the Bombay Municipal Corporation Act, 1888. Moreover, it is submitted that a provision, which is pari materia, has been interpreted by the Supreme Court in the context of an appeal, which arose against a demand made by the Municipal Corporation of Delhi under the Delhi Municipal Corporation Act, 1957. Moreover, it is submitted that a provision, which is pari materia, has been interpreted by the Supreme Court in the context of an appeal, which arose against a demand made by the Municipal Corporation of Delhi under the Delhi Municipal Corporation Act, 1957. In Municipal Corporation of Delhi vs. Trigon Investment and Trading Pvt. Ltd., (1996)3 SCC 630 , the Supreme Court held that a tax on land and building constitutes a first charge on such land and building. Moreover, the Supreme Court, it was submitted, has also held that while the cessation of the liability of transferor under section 212 would depend upon whether a notice is given to the Corporation, the liability of the transferee is in any event not excluded and the transferee is liable to pay property taxes not only for the period subsequent to transfer but even for the period anterior to the transfer. 5. In considering the submission, it would be necessary to advert to the provisions of section 149 of the Bombay Municipal Corporation Act, 1888. Subsection (1) of section 149 provides that whenever the title of any person primarily liable for the payment of property taxes on any premises, to or over such premises is transferred, the person whose title is so transferred and the person to whom the same shall be transferred shall, within three months after execution of the instrument of transfer or after its registration, if it be registered, or after the transfer is effected, if no instrument be executed, give notice of such transfer, in writing, to the Commissioner. Section 151 then provides as follows: "151(1) Every person primarily liable for the payment of a property tax on any premises who transfers his title to or over such premises without giving notice of such transfer to the Commissioner as aforesaid, shall, in addition to any other liability which he incurs through such neglect, continue liable for the payment of all property taxes from time to time payable in respect of the said premises until he gives such notice, or until the transfer shall have been recorded in the Commissioner's books. (2) But nothing in this section shall be held to diminish the liability of the transferee for the said property taxes, or to affect the prior claim of the Commissioner on the premises conferred by section 212, for the recovery of the property taxes due thereupon." Section 212 of the Act then provides as follows: "212. Property taxes due under this Act in respect of any building or land shall, subject to the prior payment of the land revenue, if any, due to the State Government thereupon be a first charge in the case of any building or land held immediately from the Government upon the interest in such building or land of the person liable for such taxes and upon the goods and chattels, if any, found within or upon such building or land, and belonging to such person; and, in the case of any other building or land, upon the said building or land and upon the goods and chattels, if any, found within or upon such building or land and belonging to the person liable for such taxes." 6. These provisions of the Municipal Act establish firstly that property tax due under the Act in respect of any building or land shall, subject to the prior payment of land revenue to the State Government, constitute a first charge upon the interest in such building or land of the person liable for such taxes. Therefore, as a result of the operation of law, property taxes constitute a first charge that flows with the land or as the case may be, the building. Secondly, section 151 provides that where a person who is primarily liable to property tax, transfers his title to or over such premises without giving notice of such transfer to the Commissioner, he shall besides being liable on account of such neglect continue to be liable for the payment of all property taxes until he furnishes such notice. However, sub-section (2) then lays down that insofar as the transferee is concerned, nothing in the section shall be held to diminish the liability of the transferee towards the payment of property taxes. However, sub-section (2) then lays down that insofar as the transferee is concerned, nothing in the section shall be held to diminish the liability of the transferee towards the payment of property taxes. Thus, the transferee in any event is bound to pay the property taxes and this liability which is a liability which fastens to the land or as the case may be, the building would continue to subsist for the period both prior to and after the date of transfer. 7. These provisions of the Bombay Municipal Corporation Act, 1888, are similar in material respects to those of the Delhi Municipal Corporation Act, 1957. The provisions of the Delhi Municipal Corporation Act, 1957, fell for consideration before the Supreme Court in Municipal Corporation of Delhi vs. Trigon Investment and Trading Pvt. Ltd. (supra). Sub-section (1) of section 128 of the Delhi Act is similar to sub-section (1) of section 149 of the Mumbai Municipal Corporation Act, 1888, in that it requires both the transferor and transferee to furnish a notice to the Commissioner of a transfer of interest in land or building which is liable to the payment of property taxes. Sub-section (4) of section 128 combines within it, the statutory provisions of sub-section (1) and sub-section (2) of section 151 of the Bombay Municipal Corporation Act, 1888. Interpreting these provisions, Mr. Justice Jeevan Reddy speaking for a Bench of two learned Judges of the Supreme Court held thus : "Now, what do the words "but nothing in this section shall be held to affect the liability of the transferee for the payment of the said tax" in sub-section (4) of section 128 mean and signify? In our opinion, the said words have to be understood in the light of the preceding provisions, viz., that the levy of the property tax is upon the lands and buildings, that the said tax constitutes the first charge upon such lands and buildings and that while the liability to pay tax lies upon the transferor, the transferee is not freed from the said liability on that account. The expression 'transfer' is not defined in the Act. If so, it has to be understood in its normal sense, i.e. in the sense it is understood in the Transfer of Property Act, 1882 but with the rider that section 128(1) recognises a transfer, even where the instrument of transfer is not registered. The expression 'transfer' is not defined in the Act. If so, it has to be understood in its normal sense, i.e. in the sense it is understood in the Transfer of Property Act, 1882 but with the rider that section 128(1) recognises a transfer, even where the instrument of transfer is not registered. The fact that possession of the flats was delivered to the respondent, that the respondent has paid the full consideration for the said flats and the further fact that the respondent has let out the flats and is in exclusive receipt of the rent clearly establishes that he is a transferee within the meaning of section 128. Indeed, he would be the owner as defined by clause (37) in section 2 of the Act. He would be the 'owner' within the meaning of and for the purposes of the Act - whatever may be the position in general law. In that sense, the respondent is equally liable to pay the said taxes. This liability of the transferee arising from the fact of his being the 'owner' of the land or building concerned should not be mixed up or confused with the proviso to section 126(1). Since the property tax constitutes first charge upon the land/building and because the land/building is fastened with this liability, the liability travels with the land/building. The transferee is liable to pay the property taxes due thereon not only for the period subsequent to transfer in his favour but even for the period anterior to the transfer. What section 128 does is to keep alive and continue the liability of the transferor to pay property taxes even after the transfer till he gives the notice contemplated by section 128(1). While making him so liable, section 128(4) declares that this liability cast on the transferor shall not relieve the transferee from the obligation to pay the said tax, as explained above. This liability of the transferee is in no way qualified, curtailed or abridged by any provision in section 126. " (emphasis supplied). 8. These provisions as well the judgment of the Supreme Court in Municipal Corporation of Delhi vs. Trigon Investment and Trading Pvt. Ltd. (supra) were placed for consideration before the learned Single Judge of this Court in Anchor Health and Beauty Care Ltd. (supra). " (emphasis supplied). 8. These provisions as well the judgment of the Supreme Court in Municipal Corporation of Delhi vs. Trigon Investment and Trading Pvt. Ltd. (supra) were placed for consideration before the learned Single Judge of this Court in Anchor Health and Beauty Care Ltd. (supra). The learned Single Judge was of the view that the judgment of the Supreme Court did not deal with the issue of sale of a property in winding up and its purchase but provided for a case of transfer of a property. While there can be no dispute about the factual position that the judgment of the Supreme Court was not dealing with a sale during the course of winding up, the Supreme Court, it must be noted, was interpreting the provisions of the Municipal Act in Delhi under which property taxes constitute a first charge on the land and building. The interpretation placed by the Supreme Court on similar provisions in the Delhi Act is that property tax constitutes a first charge on land and building and because the land or building is fastened with this liability, the liability travels with the land/building. The transferee, therefore, was held to be liable to pay the property taxes both prior to and subsequent to the date of purchase because the liability fastens to the land and building of which he is the owner. There is merit in the submission urged on behalf of the Municipal Corporation that the judgment of the learned Single Judge may not be, with respect, correct when it holds that the Municipal Corporation is not a secured creditor who can stand outside of winding up and that the only recourse that the Corporation can have is to submit a claim for adjudication to the Liquidator. Once the claim of the Corporation with regard to property taxes is held to be a first charge on the property, namely, the land and building, the provisions of section 212 would have to be given full effect unless the charge created therein is overridden by a statutory enactment having a clear effect. Neither the provisions of section 529A, nor for that matter of section 530 of the Companies Act, 1956 can be regarded as having any such effect. In these circumstances I am of the view that the judgment of the learned Single Judge in Anchor Health and Beauty Care Ltd. would require reconsideration. Neither the provisions of section 529A, nor for that matter of section 530 of the Companies Act, 1956 can be regarded as having any such effect. In these circumstances I am of the view that the judgment of the learned Single Judge in Anchor Health and Beauty Care Ltd. would require reconsideration. 9. The Registry is accordingly directed to place the papers of these proceedings before the Hon'ble the Chief Justice so that His Lordship may if it is considered appropriate, issue orders for placing the matter before a Division Bench. 10. In the meantime, conditional on the petitioners depositing with the Municipal Corporation 50% of the amount demanded by the communication dated 2nd August, 2006 and furnishing an unconditional Bank Guarantee of a Nationalized Bank for the balance of the amount to be kept alive during the pendency of the petition within a period of four weeks from today, the Municipal Corporation shall not take any coercive steps in pursuance of the communication impugned. It is, however, clarified that if the petitioners fail to do so, it would be open to the Municipal Corporation to take recourse to its powers in accordance with law. Order accordingly.