2010(6) ALL MR 191
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

S.J. KATHAWALA, J.

Satyavati Ramprasad Ruia & Anr.Vs.The Municipal Corporation Of Brihan Mumbai & Anr.

Writ Petition No.938 of 2010

14th July, 2010

Petitioner Counsel: Mr. P. M. HARIDAS
Respondent Counsel: Mr. S. S. PAKALE,Ms. TRUPTI PURANIK,Mr. NARAYAN SAHU,Federal & Rashmikant

Bombay Provincial Municipal Corporations Act (1949), S.217 - Appeal - Maintainability - Increase in rateable value of property tax - Complaint filed by co-operative housing society - Order passed by Corporation fixing rateable value - Petitioners owners and occupiers of 5 premises in society filed appeal against order - Petitioners are required to deposit disputed increased tax for entire premises - Contention that petitioners can deposit increased tax for their premises only is liable to be rejected - Writ petition is liable to be dismissed. (2003)10 SCC 533 - Foll. (1995)4 SCC 696 - Ref. to. (Para 17)

Cases Cited:
Calcutta Gujarati Education Society Vs. Calcutta Municipal Corporation, (2003)10 SCC 533 [Para 10,16]
Assistant General Manager, Central Bank of India Vs. Commissioner, Municipal Corporation for the City of Ahmadabad, (1995)4 SCC 696 [Para 14,16]


JUDGMENT

JUDGMENT :- Heard learned Advocate for the Petitioners as well as learned Advocates for the Respondents.

2. Rule.

3. Learned Advocates appearing for the Respondents waive service.

4. By consent of the parties, Rule made returnable forthwith and the Petition is taken up for final hearing.

5. By this Writ Petition, the Petitioners have prayed for setting aside the order dated 11.8.2009 passed by the Small Causes Court in Municipal Appeal (ST) No.1019 of 2004, directing the Petitioners to deposit an amount of Rs.2,03,56,651/- (Rupees two crores three lacs fifty six thousand six hundred and fifty one only) i.e. the increased rateable value in respect of the entire premises of Maker Chamber V (the said building) and to set aside the order dated 24.2.2010 dismissing the review application.

6. The Petitioners are the members of Respondent No.2 i.e. Maker Chamber V Premises Co-operative Housing Society Limited and are the owners of premises Nos.909, 910, 911, 912 and 920 situate on 9th floor of Maker Chamber-V Nariman Point, Mumbai-21 (the said premises).

7. On 1st October, 2002, the Respondent No.1-Corporation issued to the Society the impugned Bill dated 1.10.2002 for the period from 1.10.2002 to 31.3.2003 for Rs.1,76,24,858/- in respect of the said building which was on the basis of increased rateable value. Respondent No.2 Society, by its letter dated 3rd December, 2002 lodged its complaint/protest qua the said bill. The complaint of Respondent No.2 was registered by the Respondent No.1 being No.ACR/254/2001-2002. On 20th April, 2004, Respondent No.1, in the complaint filed by Respondent No.2, passed an order wherein rateable value of the said property was fixed at Rs.1,950/- per square meters as against the earlier rateable value at Rs.275/- per 10 square meters.

8. On 30th May, 2004 the Petitioners filed Municipal Appeal No.1019 of 2004 under section 217 of the Bombay Municipal Corporation Act, before the Small Causes Court in respect of the said premises owned and occupied by them, pursuant to which, a notice was issued by the Small Causes Court directing Respondent No.1 to file computation of outstanding property tax in respect of the appeal premises i.e. the premises owned and occupied by the Petitioners. The Small Causes Court, by its order dated 11th August, 2009, directed the Petitioners to deposit an amount of Rs.2,03,56,651/- with Respondent No.1 Corporation within a period of one month from the date of the said order. On 26.11.2009, the Petitioners filed a review application before the Small Causes Court seeking review of the order dated 11th August, 2009. The said review application was dismissed by the Small Causes Court by its order dated 24th February, 2010. The Petitioners have now filed the present Writ Petition impugning the orders passed by the Small Causes Court dated 11th August, 2009 and 24th February, 2010.

9. The learned Advocate appearing for the Petitioners has submitted that the Petitioners are the owners and occupiers of the said premises in the said building. The Petitioners are aggrieved by the tax which they are required to pay on the basis of increased rateable value. The Petitioners have no objection to deposit the amount of tax in respect of the premises owned and occupied by them. However the learned Judge of the Small Causes Court, Mumbai has directed the Petitioners to deposit the increased rateable value payable by the owners/occupiers of the 300 premises in the entire Maker Chamber V building amounting to Rs.2,03,56,651/-. It is therefore submitted that the said order passed by the learned Judge of the Small Causes Court, Mumbai is unjust and harsh to the Petitioners. The Petitioners are not in a position to deposit such a huge amount and consequently will not be able to seek justice in the matter of wrongful increase in the rateable value of the said premises by the Respondent No.1.

10. The learned Advocate for the Petitioners, in support of his aforesaid contention, relied on the decision of the Hon'ble Apex Court in the Calcutta Gujarati Education Society and another Vs. Calcutta Municipal Corporation and others, reported in (2003)10 Supreme Court Cases 533. Paragraphs 32, 33 and 34 of the said decision are reproduced hereunder :

"32. We have examined the provisions of the Act. We find that the said provisions do allow the right of appeal as and when there is a demand of proportionate consolidated rate or surcharge from tenants, sub-tenants or occupants. There is great force in the submission made that where the tenant is occupying only a portion of the building and his liability towards "consolidated rate" or "surcharge" is proportionately restricted to the portion of the building in his occupation, for exercising right of appeal, to make it compulsory for him to deposit the entire consolidated rate assessed and levied on the whole building, is inequitable. The relevant provisions contained in Sections 189(5) and (6) read thus :

"189.(5) Any owner or person liable to payment of consolidated rate may, if dissatisfied with the determination of objection under Section 188 appeal to the Tribunal :

Provided that such appeal shall be presented to the Tribunal within forty-five days from the date of service of a copy of the order under Section 188 and shall be accompanied by a copy of the said order.

(6) No appeal under this section shall be entertained unless the consolidated rate in respect of any land or building for the period ending on the date of presentation of the appeal on the valuation determined under Section 188 has been deposited in the office of the Corporation and the appeal shall abate unless such consolidated rate is continued to be deposited till the appeal is finally disposed of." (emphasis supplied)

33. As we had examined the provisions, since the tenants, sub-tenants or occupiers have to share the burden of tax to an appreciable extent, right of appeal cannot be denied to them. If the right of appeal is held to be available to them on payment of the entire tax levied on the whole building even though they occupy only a portion of it, the remedy of appeal would be highly onerous and virtually denied.

34. In the aforesaid circumstances, on examinations of the provisions of the Act and as reasonably construing Section 189(6) of the Act, we find that the "right of appeal" as an effective remedy has to be given to a tenant, sub-tenant or occupant who is a "person liable" with "person primarily liable" of the "consolidated rate" as apportioned as his liability and held payable by him. Any other interpretation would frustrate the very object of providing the right of appeal to "person liable" with the "person primarily liable". This is how the provision has to be reasonably interpreted and read down."

11. It is therefore submitted on behalf of the Petitioners that the order of the Small Causes Court directing the Petitioners to deposit the entire amount of Rs.2,03,56,651/- be quashed and set aside and the Petitioners be directed to deposit the increased tax only to the extent of the five premises owned and occupied by them.

12. Mr. Narayan Sahu, the learned Advocate appearing for the Respondent No.2 Society has pointed out that the Society has filed a Writ Petition before this Court impugning the order dated 28.4.2004 of Respondent No.1 fixing rateable value of the building at the rate of Rs.1950 per 10 square meters. The said Writ Petition is admitted by this Court and the order of Respondent No.1 dated 28th April, 2004 is stayed. It is therefore submitted on behalf of the Society that the Small Causes Court ought not to have entertained the appeal filed by the Petitioners.

13. Admittedly the Petitioners were not aware of the said writ petition filed by the Society and the orders passed therein. Admittedly the Respondents, had not pointed out to the Small Causes Court that a Writ Petition impugning the order of Respondent No.1 dated 28.4.2004 is filed by Respondent No.2 in this Court and the order dated 28th April, 2004 is stayed. In view thereof, the Respondents now cannot be heard to say that the Small Causes Court ought not to have entertained the Appeal filed by the Petitioners impugning the order dated 28th April, 2004 passed by the Respondent No.1.

14. The learned Advocate appearing for the Respondent No.1-Corporation has relied on the decision of the Hon'ble Apex Court in the case of Assistant General Manager, Central Bank of India and others Vs. Commissioner, Municipal Corporation for the City of Ahmadabad and others, reported in (1995)4 SCC page 696. Paragraphs 15 and 16 of the said decision are relevant and reproduced hereunder :

"15. For all the above reasons, we find ourselves unable to agree with the High Court that the tenant cannot file an appeal and that it is only the owner/landlord of the premises who can file an appeal under Section 406 of the Act. The High Court has proceeded on the footing that since the owner of the premises is primarily liable for the property taxes and also because the Act does not specifically confer upon the tenant the right to object and file an appeal, the tenant has no such right. But, as explained hereinabove, the tenant is a directly affected party and it would not be just or equitable to deny him such a right unless the statute says so specifically. We have pointed out supra that it does not create any such bar even by implication. Nor is the right to file an appeal conditioned upon the filing of a complaint by the tenant. In other words, it cannot be said that since the tenant has not filed the complaint in a given case, he has no right to file the appeal. The right to appeal is governed by Sections 406 and 407. Section 407 speaks of disposal of complaint; it does not say that the complaint must have been filed by the person proposing to file the appeal. It may be noticed that the right of appeal conferred by Section 406 is more akin to the right of appeal provided by Section 96 of the Code of Civil Procedure. It provides a right of appeal but does not say who can file the appeal. It means that any person who is affected by or who can be said to be aggrieved with the order is entitled to maintain an appeal so long as he complies with the conditions attaching the said appeal. Where the tenant lodges a complaint, he can directly file an appeal under Section 406 but where he himself has not filed a complaint, he has to file the appeal with the leave of the appellate Court.

16. We do, however, recognise that the above holding gives rise to certain practical difficulties. We may elaborate. Where there is one tenant for one premises, no difficulty will arise in applying the above principle. (By one premises, we mean a unit for the purpose of assessment of property taxes). But there may be cases where there are more than one tenant in one premises. There may indeed be cases where one premises is occupied by a large number of tenants in Small portions. If only one or some of such tenants file an appeal, the decision obtained by them would no doubt apply to all but before the appeal can be filed, the tenants will have to deposit the disputed tax as contemplated by Section 406(e). In other words, the tenant or tenants filing the appeal would not only have to deposit the disputed tax proportionate to the premises occupied by them but the disputed tax with respect to the whole of the premises. This may be a little hard but looking to the scheme of the Act it is not possible for us to say that such tenant or tenants would be entitled to say that they would deposit the disputed tax proportionate to the portions occupied by them only or file and appeal only in respect of the portion of the property occupied by him. No such splitting can be thought of or permitted. Such difficulties, we must say, cannot induce us to hold that the tenant has no right to prefer a complaint or to prefer an appeal. The circumstances mentioned in the preceding paragraphs are strongly suggestive of such a right in the tenant." (emphasis supplied)

15. The learned Advocate appearing for Respondent No.1 has submitted that Section 406 of the Bombay Provincial Municipal Corporation Act, 1949, 59 of 1949 and Section 217 of the Bombay Municipal Corporation Act under which the Petitioners filed an Appeal before the Small Causes Court at Mumbai are identical. It is therefore submitted that the present case is squarely covered by the said decision of the Hon'ble Apex Court, wherein it is held that the tenant who has not filed a complaint can file an Appeal with the leave of the Appellate Court. However, the tenants filing the appeal would not only have to deposit the disputed tax proportionate to the premises occupied by them but the disputed tax with respect to the whole of the premises. The Hon'ble Apex Court has further held that though this may be little hard, but looking to the scheme of the Act, it is not possible for the Court to say that such tenant or tenants would be entitled to say that they would deposit the disputed tax proportionate to the portion occupied by them only or file an appeal only in respect of the portion of the property occupied by them. No such splitting can be thought of or permitted.

16. In response, the only submission made by the learned Advocate appearing for the Petitioners is that the decision of the Hon'ble Supreme Court in Assistant General Manager, Central Bank of India (Supra) is subsequent to its decision in Calcutta Gujarati Education Society (Supra) cited by the Petitioners and therefore the Respondent No.1 Corporation ought not to have cited the decision in Assistant General Manager, Central Bank of India and others (supra). This Court had to remind the learned Advocate appearing for the Petitioners that the Hon'ble Apex Court has in its decision in Calcutta Gujarati Education Society (Supra) clearly distinguished its decision in the case of Assistant General Manager, Central Bank of India and others (Supra) in Paragraphs 38, 39 and 40 which are reproduced hereunder :

"38. It is true that various provisions of the Bombay Act and the Act under consideration before us applicable to Calcutta, are somewhat similar. However, some of the most outstanding features of the Calcutta Act are not to be found in the Bombay Act. In the Act applicable to Calcutta which is for consideration before us, the tenant, sub-tenant or occupier have to be involved by public notice and individual written notices in the course of valuation and assessment of the "consolidated rate" or tax. Pursuant to the aforesaid public and individual notices, they have a right to object to the proposed valuation and assessment. They can also submit returns in response to the above notices. The annual value is determined on the basis of actual rent and market rent and is apportioned between the owner and lessor, as the person "primarily liable" and the tenant, sub-tenant or occupier, who are described as "persons liable". The provision of sub-section (6) of Section 178 creates an obligation on the Municipal Commissioner to supply information, on payment of fee to the person "primarily liable" and to "persons liable" regarding the apportionment of the "consolidated rate" or tax on the properties among the several occupiers. The "consolidated rate" so determined for a property is recoverable only from the "person primarily liable" who is given a right of reimbursement from the other "persons liable". The consolidated rate is also made recoverable from the "persons liable" by attaching their rents payable to the "person primarily liable" and giving corresponding rights to the parties to claim adjustment of the tax paid from the quantum of rent.

39. The Act applicable to Calcutta also imposes a "surcharge" as part of consolidated rate or tax of which the whole burden is on the tenant, sub-tenant or occupier who is putting the premises to non-residential or commercial use. The burden of this "surcharge" as part of "consolidated rate" is only on the person putting the premises to non-residential or commercial use. The imposition of this surcharge for properties in use for non-residential and commercial purposes with apportionment of that liability only on persons using the property in the manner aforesaid, is a special feature of the Act applicable to Calcutta and which makes this provision as also other provisions to a great extent different from the provisions of the Bombay Act which were considered and the right of appeal in that case was held to be allowable only on full deposit of property tax for the whole property or building which is treated to be one unit for valuation and assessment of tax.

40. We have noticed the distinguishing features and the scheme of the act applicable to Calcutta before us for interpretation and the Act Applicable to Bombay. We have resorted to a reasonable interpretation of the provisions of the Act applicable to Calcutta. We have come to the conclusion that as tenants, sub-tenants and occupants are "persons liable" with owner or lessor being the "persons primarily liable", the former category of "persons liable" have a right to prefer appeal against proposed valuation and assessment of "consolidated rate" by deposit of that portion of "consolidated rate" or surcharge which is found leviable and payable by them. Such portion of "consolidated rate" and "surcharge is separately" determined and ascertainable from the order of assessment and the demand bills and notices for recovery, if any, issued to the persons "primarily liable" or "persons liable". The decision of this Court in the case of Central Bank of India on the provisions of the Bombay Act, therefore, in our opinion, is distinguishable. In the case before us, the tenants, sub-tenants and occupiers as "persons liable" have to be recognized as aggrieved parties with independent right of appeal to them on pre-deposit of a portion of a "consolidated rate" or surcharge, found leviable and recoverable from each of them."

17. In the above view of the matter, though the Petitioners are entitled to file an Appeal impugning the order of the Respondent No.1 Corporation with the leave of the Appellate Court, the Petitioners are required to deposit the disputed tax in respect of the whole of the building. The Petitioners therefore cannot be heard to say that the Small Causes Court has erred in directing the Petitioners to deposit the entire amount of Rs.2,03,56,651/- and the Small Causes Court ought to have directed the Petitioners to deposit the disputed tax proportionate to the portion occupied by them. Under the circumstances, the Rule stands discharged and the above Writ Petition is dismissed with no order as to costs.

Petition dismissed.