I have a Octavia vrs, i pulled the handbrake on and a loud pop/bang was heard. It still works fine as do the other brakes however now when driving there is a squeak coming from the wheels plus after a few miles the brakes smell bad and are smoking. The tyre pressure warning light has also come on in the dash. I could do with an idea of the problem before i take it to get repaired so the mechanic doesn't try ripping me off.
It sounds as though your Octavia has a mechanical handbrake system. With this type of system, there's a main cable (or pull) which goes from the hand brake actuator to a splitter, then has two cables which go back to the rear brakes, which then actuates the parking brakes (either part of the primary brakes, or a secondary brake only used for parking). If one of the secondary cables broke (even partially), it could be producing the symptoms you're talking about. One side of the two brakes would be providing enough stopping force to hold the vehicle in place, which is why you're still seeing them as working.
As far as tire pressure goes, this would be a separate issue. If the indicator doesn't show you which tire is low, check all four for proper inflation. If all of them have proper inflation (check your driver's side door jam for a sticker which shows you what it should be), you may have a bad wheel sensor.