1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD. FIRST APPEAL NO.1835 OF 2009. The Fedral Bank Ltd., A Banking Company incorporated under the Indian Companies Act, 1956, having its Registered Office at Aluva, Kerala and branch interalia at Aurangabad, through its Branch Manager Babu S/o Gopalan, Age 54 yrs. Occ.Service as Branch Manager, R/o 163, Nandavan Colony, Aurangabad. ... Appellant. Versus The Municipal Corporation Aurangabad, through its Commissioner, Aurangabad. ... Respondent. ... Mr.S.S.Choudhari, advocate for the appellant. Mrs.Manjusha A.Deshpande, advocate for the Respondent ... CORAM : S.V.GANGAPURWALA,J. Date : 06.09.2010. 2 PER COURT 1. The appellant is the original plaintiff, assails the judgment of the Civil Judge (Senior Division), Aurangabad, dated 30.4.2009, passed in Special Civil Suit No. 232/2006. 2. The defendant issued demand notice to the plaintiff for payment of property tax of Rs.3,29,940/-. The said notice was challenged by the plaintiff/present appellant by instituting Special Civil Suit No.232/2006. 3. The trial Court after recording the evidence came to the conclusion that the defendant Municipal Corporation has followed the necessary procedure in respect of levy and assessment of the property tax and has dismissed the suit. 4. Mr.Choudhari, learned counsel for the appellant canvassed following propositions : (i) The defendant Municipal Corporation has 3 failed to follow the mandatory Rules as laid down in the taxation Rules framed by the statutory authority and also taxing provision as embodied in the Bombay Provincial Municipal Corporation Act. ii) Rule 7 which lays down the procedure for fixing the rateable value of any building or land assessable to property tax is not complied. iii) So also Rule 9 which lays down the procedure for preparation of the assessment book and Rule 30 which mandates issuance of a public notice when valuation of a property has been completed have not been followed. iv) The mandatory requirements were not complied with and as such the notice demanding the property tax is bad in law. The trial Court erred in not considering this aspect in proper perspective. 5. Per contra, Mrs.Deshpande, learned counsel appearing for the Respondent Corporation contended that 4 i) The provisions have been scrupulously followed. The plaintiff has nowhere stated the quantum of the standard rent. In absence of the same the rent which was paid by the plaintiff was considered as standard rent. ii) It is not mandatory to issue public notice when a personal notice has been given. The learned counsel relies on the judgment of the Division Bench in a case of "Solapur Municipal Corporation of the City of Solapur Vs. Shivaji Works Ltd., Shivshali, Solapur" 1993 Mh.L.J.80. iii) The tax was levied for the first time on the said property as such provision of Section 52 of the Bombay Provincial Municipal Corporation Act was followed and notice under said provision was issued. 6. It is a trite law that the taxing statute has to be construed strictly. The tax is to be assessed and recovered in consonance with the procedure laid down under the taxing statute. The levy of tax which is a legislative act is not a subject matter of dispute in the 5 present proceedings. The plaintiff had disputed the quasi judicial act of the Respondent i.e. assessment of the property tax and the executive action i.e. recovery of tax. 7. When assessment of the property tax is a quasi judicial Act, then principles of natural justice have to be followed. Rule 13 contemplates the same. It would be seen that a personal notice was issued to the plaintiff. The said fact is also admitted by the plaintiff in its evidence. Even it is admitted that the plaintiff had given information vide Exh.36 and 38 on 25.3.2006 that the rent of Rs.40,000/- p.m. is paid by the plaintiff of the property which is assessed to property tax. In such circumstances, when the plaintiff itself has given the information regarding the rent and no other evidence is brought on record that the rent that has been paid is not the standard rent then in such circumstances non-compliance of Rule 7 cannot be agitated by the plaintiff. 8. Even the plaintiff has admitted that he 6 has received the personal notice regarding fixation of the rateable value. In such circumstances, when he has received the personal notice then in such circumstances, compliance of Rule 13 has been made. The compliance of Rule 13 is for the purpose that the plaintiff should know the amount of rateable value fixed and should have an opportunity to put forth his objection. The said purpose is achieved when a personal notice is served upon him. As such non-issuance of a public notice would not vitiate the whole procedure of imposing the property tax. The Division Bench of this Court in a case of "Solapur Municipal Corporation of the City of Solapur Vs. Shivaji Works Ltd., Shivshali, Solapur" referred supra has observed : "4. Shri Naik, learned counsel appearing on behalf of the Municipal Corporation, submitted that both the authorities below were in error in holding that the failure to give public notice under rule 13 vitiated the entire proceedings of levy of 7 rateable value. The learned counsel submitted that the conclusion of the two authorities below that public notice under rule 13 is mandatory is incorrect. We find considerable merit in the submission of the learned counsel. As mentioned hereinabove, the determination of rateable value in respect of the properties of the company was undertaken for the first time after the area of the village Kumathe was included within the limits of Municipal Corporation. As rateable value was determined in the first time, it was incumbent upon the Corporation to follow taxation rules set out in Chapter VIII of the Schedule to the Act. It is not in dispute that the Commissioner has published a notice under sub-rule (1) of rule 15 to enable the owners of the property including company to lodge a complaint against the amount 8 of rateable value entered into assessment book. It is also not in dispute that the special notice contemplated under sub-rule (2) of rule 15 was served on the company and the premises of the company were assessed for property tax on the first occasion and the rate of tax was more than a tax which the company was paying to the village panchayat. The sole grievance of the company is that the entire procedure of levy of rateable value and recovery of tax was vitiated for failure to strictly comply with the requirement of sub- rule (1) of rule 13. In our judgment, the two authorities below were clearly in error in proceeding to strike down the exercise carried out by the Corporation to levy property tax on assumption that the requirements of sub-rule (1) of rule 13 are mandatory. The plain reading of the 9 sub-rule makes it clear that after the entries required to be made by clauses (a), (b), (c) and (d) of rule 9 have been completed, the Commissioner shall give public notice thereof and of the place where the ward assessment book may be inspected. The public notice contemplated under this sub-rule is to give notice to the owners of various properties that an assessment book prepared under rule 9 is available for inspection at a particular place. The public notice is required to be given by advertisement in the local newspapers and also by posting placards in conspicuous places. The two authorities below proceeded to hold that the requirement of giving public notice is mandatory because of the use of expression "shall". The conclusion reached by the authorities below is clearly erroneous. It is 10 now well settled by catena of decisions of the Supreme Court and this Court that whether the provision is mandatory or directory is not dependent upon the use of expression "shall" or "may". What is required to be ascertained is the purpose or the object of the rule and whether any breach in following the rule affects substantial right of the person concerned. Applying this well settled test, it is obvious that the requirement of giving public notice under rule 13 cannot be held to be mandatory. The object of giving public notice is informing the owners of buildings or land about the preparation of assessment book under rule 9 and to enable the property owners to inspect the same, if so desired. There is no obligation cast upon the property owners to inspect the same because the failure to do so does not result into any consequences 11 adversely affecting the owners. The rule is merely an enabling one and the Commissioner is required to public notice only to inform the owners about the preparation of assessment book. In our judgment, the rule can not be held to be a mandatory one and it is obviously directory one and consequently, the breach thereof can not vitiate the entire process of assessment of rateable value. In this connection, it would be appropriate to distinguish between the provisions of rule 13 and rule 15. Rule 15 also demands that the Commissioner shall give a notice and this notice is to be given to the property owners to enable them to lodge complaints against the amount of rateable value. Sub-rule (2) of rule 15 demands the Commissioner to serve special notice in case the rateable value is increased. The failure to give 12 public notice under rule 15(1) or special notice under sub-rule (2) of rule 15 clearly affects the right of a property owner to lodge complaint and in that case the requirement of public notice has to be treated as mandatory. In our judgment, the two authorities below overlooked the object and the purpose of rule 13 and erroneously proceeded to conclude that requirements of Rule 13 are mandatory because of the use of the expression "shall". The decision of the two authorities below holding that the entire process of determination of rateable value is null and void for failure to give notice contemplated under rule 13 therefore cannot be sustained. It would not be out of place to state that the failure to give public notice under rule 13 has in no manner adversely affected the interest of the company. The learned counsel for 13 the company very fairly stated that notice under sub-rule (2) of rule 15 was served and consequently the company did lodge complaint against the amount of rateable value. In these circumstances, the exercise undertaken by the Corporation in determining rateable value in respect of properties which were originally situated within village Kumathe and which were subsequently included within the city limits of Corporation cannot be faulted with." 9. Even the trial Court has observed that the plaintiff is not in a position to show that the procedure regarding preparation of assessment book has not been followed. In such circumstances, no error can be found in the judgments of the Courts below. The appeal is devoid of merit and is dismissed with no order as to costs. 10. In view of dismissal of First Appeal, 14 the Civil Application does not survive and is accordingly disposed of. (S.V.GANGAPURWALA,J.) asp/office/fa1835.09