SUNDARAM FINANCE LIMITED, vs THE COMMISSIONER

2026:MHC:4402
WP No. 37721 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 27-10-2026
CORAM
THE HON'BLE MR JUSTICE S. M. SUBRAMANIAM
AND
THE HON'BLE MR.JUSTICE R.RAJESH VIVEKANANTHAN
WP No. 37721 of 2026
CNR: {HCMA012167642026}
Sundaram Finance Limited,
Rep. by its Authorised Signatory,
Mr. Rajiv Bharathwaj,
21, Patullos Road,
Chennai - 600 002.
..Petitioner(s)
Vs
1. The Commissioner
Greater Chennai Corporation,
Rippon Building, Park Town,
Chennai 600 003.
2. The Zonal Officer,
Greater Chennai Corporation,
Zonal Office - V,
61, Basin Bridge Road,
Chennai 600 021.
..Respondent(s)
Writ Petition filed under Article 226 of the Constitution of
India issuing writ of mandamus directing the respondents to de-seal and
unlock the petition Schedule property.
For Petitioner(s): Mr.S.Vasudevan
For Respondent(s): Mr. S. Gopinathan
Standing Counsel
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2026:MHC:4402
WP No. 37721 of 2026
ORDER
(Order of the Court was made by S.M.Subramaniam J.)
Writ of mandamus has been instituted to direct the respondents to
de-seal and unlock the petition schedule property.
th
2. Petitioner purchased property measuring 3/5 of 11,195 sq. ft.
including the common area identified as the Sixth Floor, Tower II,
th
"Rayala Towers", together with the leasehold interest to an extent of 3/5
leasehold undivided interest out of 3,305 sq. ft. of undivided land share
leasehold interest in the property bearing Old Nos. 781-785, Anna Salai,
Chennai – 600002 through Court Auction conducted pursuant to the
Orders passed by the Learned Master of High Court in E.P. No.10 of
2017.
3. The grievances of the petitioner is that Greater Chennai
Corporation authorities locked and sealed the property without issuing
any lock and seal notice to the petitioner. However, petitioner admits that
notice of demand dated 06.01.2026 demanding arrears of property tax to
the tune of Rs. 44,67,153/- was affixed on the premises by Greater
Chennai Corporation authorities. It is further contended that property tax
due was by the previous owner of the property and therefore, petitioner
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2026:MHC:4402
WP No. 37721 of 2026
is not liable to pay property tax arrears. Further, petitioner pleads that
the lock and seal is to be removed.
4. Learned Standing Counsel for Greater Chennai Corporation
would oppose by stating that Corporation authorities have not locked
and sealed the premises. Even at the time of public auction, property
was under lock and seal. Corporation authorities have affixed the notice
of demand dated 06.01.2026, since petitioner has not acknowleged the
demand notice. That apart, property was sold through public auction and
admittedly, petitioner is the purchaser of the property. Therefore, he
cannot now plead that Corporation should recover the arrears of
property tax from the previous owner.
5. Learned Counsel for the petitioner would further submit that no
charge has been created on the property in respect of arrears of
property tax. Therefore, Corporation cannot recover property tax arrears
from the auction purchaser. In this regard, he relied on the judgment of
the Hon’ble Supreme Court in the case of Ahmedabad Municipal
Corporation Of The City Of Ahmedabad Vs. Haji Abdulgafur Haji
1
Hussenbhai .
1
1971 1 SCC 757
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2026:MHC:4402
WP No. 37721 of 2026
6. This Court has considered the rival submissions made by the
parties to the lis on hand.
7. Facts in brief would show that the petitioner is an auction
purchaser. Previous owner of the property is a defaulter and not paid the
arrears of tax to Greater Chennai Corporation. Demand notice was
affixed on the door of the premises on 06.01.2026. Petitioner has not
challenged the demand notice, but filed the writ petition for removal of
lock and seal on the ground that Corporation authorities have no power
to lock and seal the premises and recover the arrears of property tax.
Further, petitioner contends that he is not liable to pay the property tax,
since it is the liability on the part of the previous owner.
8. Regarding the judgment relied on by the Ahmedabad
Municipal Corporation case cited supra , the Apex Court considered the
facts in the said case and held that constructive knowledge of the
existence of such municipal taxes and of the reasonable possibility
of those taxes being in arrears are to be ascertained based on facts
of each case. Therefore, Hon’ble Supreme Court had not prohibited
recovery of arrears of property tax from the auction purchaser, but
held that the constructive knowledge of the existence of such
municipal taxes and of the reasonable possibility of those taxes
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2026:MHC:4402
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being in arrears are to be ascertained based on facts of particular
case.
9. The details regarding the arrears of property tax are very much
available in the official website of Chennai Corporation. Petitioner is a
reputed finance company, namely Sundaram Finance Limited. They are
dealing with financial transactions and in trading business. Therefore,
they cannot plead ignorance regarding the arrears of property tax due to
Chennai Corporation at the time of purchase of the subject property.
Hon’ble Supreme Court in the Ahmedabad Municipal Corporation
case cited supra in clear terms held that the constructive knowledge of
the existence of such municipal taxes and of the reasonable possibility
of those taxes being in arrears are to be considered by the Courts based
on facts of each case.
10. In the present case, petitioner being a finance company,
purchased the property through public auction, now cannot plead
ignorance regarding the arrears of property tax due to Corporation at the
time of auction purchase. Therefore, the said judgment is of no avail to
the petitioner for scuttling the entire action initiated for recovery of
arrears of property tax due to the Corporation.
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2026:MHC:4402
WP No. 37721 of 2026
11. Notice of demand was affixed in the premises on 06.01.2026.
Petitioner has enclosed the copy of the notice of demand in the typed
set of papers filed along with the present writ petition. However, learned
counsel for the petitioner states that Corporation has no power to lock
and seal the property. Learned counsel for the petitioner would contend
that notice of demand was addressed to the previous owner. Therefore,
petitioner is not liable.
12. Pertinently, no enforcement action as contemplated under
Section 116A of the Tamil Nadu Urban Local Bodies Act read with Rule
269 of the Tamil Nadu Urban Local Bodies Rules, 2023 has been
initiated against the petitioner so far. Corporation affixed notice of
demand in the premises, which was addressed to the previous owner.
However, Corporation is empowered to initiate all further action to
recover the arrears of property tax from the purchaser of the property by
following the procedures as contemplated under Section 116A r/w Rule
269.
13. In the present case, at the time of auction purchase, petitioner
would have verified the property tax arrears, electricity consumption
charges and other Government dues pending in respect of the subject
property. Petitioner cannot plead ignorance. They had knowledge and
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2026:MHC:4402
WP No. 37721 of 2026
purchased the property through public auction, and now cannot turn
around and plead that arrears of property tax is to be recovered from the
previous owner. On sale of property, purchaser is liable to pay the
arrears of property tax, arrears of electricity, consumption charges and
other Government dues, if the previous owner has not paid. However,
the purchaser may initiate appropriate legal action to recover the same
from the previous owner based on the agreed terms if any. However,
purchaser of property cannot deny payment of arrears of property tax to
the Corporation.
14. The principle of Caveat Emptor would apply and the purchaser
of property must be beware of the arrears of property tax and other dues
to the Government. In the present case, except issuing a demand notice
to the previous owner, Greater Chennai Corporation has not initiated any
further action to recover the arrears of property tax due to the
Corporation. Therefore, Corporation authorities are empowered to
initiate recovery proceedings by following the procedures as
contemplated under Section 116A of the Act read with Rule 269. A
revised demand notice is to be issued to the writ petitioner for recovery
of arrears of property tax. On receipt of any such demand notice from
Corporation, petitioner is at liberty to defend their case in the manner
known to law. Authority competent shall follow the procedures as
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2026:MHC:4402
WP No. 37721 of 2026
contemplated under Section 116A of the Tamil Nadu Urban Local
Bodies Act read with Rule 269 of the Tamil Nadu Urban Local Bodies
Rules, 2023 and recover the property tax arrears and other dues, if any.
15. Granting liberty to the Corporation to initiate all appropriate
recovery proceedings under the Act and Rules, and further granting
liberty to the petitioner to defend his case in the manner known to law,
writ petition stands dismissed. No costs. Consequently, the connected
miscellaneous petitions, if any, are closed.
(S.M.S.,J.) (R.R.V.,J.)
27-10-2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
GD
To
1. The Commissioner
Greater Chennai Corporation,
Rippon Building, Park Town,
Chennai 600 003.
2. The Zonal Officer,
Greater Chennai Corporation,
Zonal Office - V,
61, Basin Bridge Road,
Chennai 600 021.
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2026:MHC:4402
WP No. 37721 of 2026
S.M.SUBRAMANIAM, J.
AND
R.RAJESH VIVEKANANTHAN, J.
GD
WP No. 37721 of 2026
27-10-2026
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