Encumbrance certificates must reflect tax dues, says HC

In a significant order, the Madras High Court Bench here has directed State government to devise a mechanism to ensure that dues towards electricity consumption charges, municipal tax, home loans and so on get reflected on encumbrance certificates issued by Sub-Registrars with respect to the immovable properties concerned.

Justice R. Mahadevan issued the direction while disposing of a writ petition filed by the owner of a huge tract of land who had been denied electricity service connection by Tamil Nadu Generation and Distribution Corporation (Tangedco) for one piece of land as he did not settle dues that were not paid by one of his tenants on another piece of the land.

Shocked over Tangedco having taken years together to recover the dues from the tenant, who ultimately died leaving the corporation with no other option but to demand the dues from the land owner, the judge held that the demand was not legally unsustainable since the electricity service connection had been given only in the name of the tenant and not the land owner.

He directed the High Court Registry to mark a copy of his judgement to the chairman of Tangedco and directed him to take effective steps to ensure that details with respect to electricity dues were communicated forthwith to the Inspector General of Registration who should ensure that the encumbrance certificates issued by his office, with respect to immovable properties, reflects the dues.

“As one step ahead, there shall be a direction to the government that wherever there is an encumbrance over the properties pertaining dues to the government like the municipal tax, electricity charges, loan availed from banks and so on and so forth, a charge shall be created immediately on such properties and the Government must ensure that the same should be reflected in the encumbrance certificate so as to avoid unnecessary litigations at the instance of an innocent purchaser or from miscreants.

“In the present context, such direction becomes very much necessary so that not only the interests of the purchasers could be saved but also that of the government departments and their revenue,” he added.