I need urgent advice
KETAN DESAI
(Querist) 11 January 2013
This query is : Resolved
Dear Sir.
COULD YOU PLEASE HELP ME & ADVICE.
I bought a Flat in an apartment. Flat was in the name of Mr X , Mrs Y and Ms.Z (MARRIED Daughter).
Mr.X died and his legal heirs Mrs.Y (Wife), Ms.Z (daughter) and Mr.AB (His Son entered into the shoes of deceased) sold this Flat to me during last year in June.
We got the Registry done and on the registry papers it was clearly mentioned that " the Vendors has all the rights to use all the facilities and amenities provided in the said flat (building complex) and no one else has any right , title and interest in the same except Vendors which is free from all sorts of encumbrances, charges, demands, liens, litigation, mortages, attachment, prior agreement to sell, acquisition or requisition etc.The Vendors have also not been restrained from selling, transferring or mortgaging the same by way of any injunction of any court or authority and the vendors have got absolute right, title and interest to sell, transfer and mortgages the same in any manner whatsoever as the same is also not attached under any decree of the court or by any authority for recovery of any taxes or dues whatsoever."
In the Registry Papers it is also mention " That the Vendors do hereby make convenient and declare that they have not done any such thing whereby the flat hereby sold and transferred be lost from the hands of the vendees , if the vendees suffer any loss due to any act or omission committed by the vendors or on account of anything found contrary to the covenants and declaration made in this deed the vendees shall be entitled to realize all the cost, losses, investment alogwith interest from the person and property of the vendors"
Just for info, Mr.X was running his factory and it was Pvt.Ltd and his daughter (Ms.X) was partner in his company. Afer the death of Mr.X , his family winded up his business and sold out all assets including the Flat I purchased.
Now after one Year of my purchase of this flat, two guys from local Tehsil came and showed me the papers that my flat has been attach for auction to recover old dues of their pending Sales Tax (Year 2008 -2009). The Recovery letter was in Mr.X Company NAME. I said you should go to factory, and they said we are not from TEHSIL and we have the recovery ntice from DM to attach this flat.
I told them that I purchased this flat and has been registered in my name and in the registration papers above points has been clearly mentioned than how come they can attach my property. They said under 'section 34" (I have no idea about this) they have the right to attach and auction the property.
I spoke to the Old landlords (they now live in other state) and they said they will take care of this issue through their lawyer but now I am quite worried about my Property I purchased.
Could you please advice me on if there any chances that
1) Is DM can attach my property on such grounds and auction it for the recovery of Mr.X Company dues against Sales Tax (2008-2009)??
2) Is there any law which can help me to get out of this situation ??
I would be highly obliged if you can give me some advice on this matter.
Anirudh
(Expert) 11 January 2013
Many of the States in their Value Added Tax (i.e. sales tax) Act have provision according to which, the Government (Sales Tax / Commercial Tax Department) will have FIRST CHARGE on the property of the 'Dealer' to recover the amount of tax, interest or penalty for which the said 'Dealer' was liable.
Thus, if any Value Added Tax (sales tax) was due from the partnership company, then they have the legal right not only to attach the property but to dispose of the same and to realise their dues.
Therefore, better consult your lawyer and take immediate action against your vendors, do not simply rely upon their statement that they will take care.
(a) civil suit for recovery of the amount paid by you for the purchase of the flat and also damages suffered by you;
(b) a criminal case under Sec. 420 IPC and other sections as may be advised by your lawyer.
IF you delay, you will be the ultimate sufferer. If need be, you may inform your vendors (trough legal notice) that you will be initiating the above proceedings, unless they pay the sales tax dues and get clearance from the department.
KETAN DESAI
(Querist) 11 January 2013
Thank you Mr.Anirudh for your valuable advice.
I am talking about Uttar Pradesh Law.
I have a question ...Mr.X was running his factory (in well known Industrial area)and he sold out a part of this factory premises to other party when he was alive and after his death his legal Hiers sold the remaining part of that property to the same person (like they sold this flat to me).
So in this case will Govt.authorities will attach my Flat first to recover the dues or they will first go & attach the factory premises & the factory Shed.
As this dues was against the company so ARE they not liable to first takeover the factory area for the recovery. Outstanding amount is around 500K.
Please advice. Thank in advance for your kind advice on above.
KETAN DESAI
(Querist) 11 January 2013
Sorry to bother you Mr.Anirudh.
One more question in mind
At the time of the Purchase of this Flat there's no recovery NOTICE from the Sales Tax department and even in my Registry Papers all Vendors have made this declaration. Only after this declaration from them we got the Flat REGISTERED and now this is my NAME.
In this case how can a Govt.Authorities can attach my Flat which was sold & registered almost 08 Months back.
And if they can do it now then there are good possibilities that such Dues can arise in future too. In that case what precautions should I do to avoid such tensions. PLease help me in this matter.
KETAN DESAI
(Querist) 11 January 2013
Dear Mr.Anirudh Sir,
Please let me know if I can send the Legal Notice to the Vendors at this stage because for the moment Tehsil people (after discussing the matter on phone with Vendors) have given 15 days grace time to settle the issue.
And further I have no papers or notice in my hand nor TEHSIL People has put any seal or notice on the flat. So on what grounds I can send this legal notice to Vendors. Please advice.
Anirudh
(Expert) 11 January 2013
Needless to say, you have to consult your local lawyer. Though the authorities might have given 15 days grace period, it is not clear to whom they have given such a grace period. I understand that the grace period is given to you and not to the Vendors.
Based on the things that had happened so far, please give the legal notice now itself. For that you need not to have any document from the Authorities. Your words are good enough.
As regards there being no 'Recovery notice' earlier etc., you may not know. Because such notice might have been issued to the Dealer / his legal representatives and not to you.
The Authorities can go after any of the property of the dealer (there is no rule or law that they have to go against any property first and then another property).
The statement by the vendors in the Sale Deed that the property is free from all encumbrances is not enough. In case such declaration getting proved wrong (as in this case), they are obliged to return you your money. Or else they have to settle the dues of the Sales Tax Department.
Your registration is defective, especially in view of the sales tax due by the vendors. As per the law, the sales tax department has first charge over the property in question. Any registration by the vendors in your favour would tantamount to fraud by the vendors and will not bind the sales tax department from attaching/disposing of the property, nor will you be able to say that you have a good title over the property just because the registration has taken place in your name.
