1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.3321 OF 2006 IN SUIT NO.2784 OF 2006 Farida Usman Kamani & ors. .. .. Plaintiffs v/s. Bank of Baroda & anr. .. .. Defendants Ms.Yamini Chandandram i/by M/s.Umesh Shetty & Co. for Plffs. None for Defts. ----- CORAM : SMT.ROSHAN DALVI, J Dated : 17th July,2009 P.C. : 1.The Plaintiffs are the owners of the suit premises. Defendant No.1 is the licensee in respect of some of the flats in the suit premises. Defendant No.2 is the Municipal Authority to whom property taxes are required to be paid, essentially by the owners and, upon any agreement with the licensee for such payment, by the licensee. 2.The Plaintiffs entered into an agreement with Defendant No.1 of lease as well as licence. The last of the Agreements is stated to be dated 1.9.2005. Under an agreement, Defendant No.1 was to pay all the taxes, cesses, charges and levies payable to Defendant No.2. 2 Defendant No.1 was to indemnify the Plaintiffs to that extent. If, however, Defendant No.2 did not pay and the Plaintiffs paid the taxes, the Plaintiffs were to forward a xerox copy of the receipt issued by Defendant No.2 to Defendant No.1. 3.In terms, therefore, Defendant No.1 agreed to pay the taxes which were otherwise payable by the Plaintiffs as the owners. If as per the agreement between the plaintiffs and Defendant No.2, Defendant No.2 made any breaches, the Plaintiffs would have to make payment and recover it from Defendant No.1. 4.The Plaintiffs Advocate states that Defendant No.1 has handed over possession of the licensed premises to the Plaintiffs. The Plaintiffs continued to be the owners. Their liability, as the owners, therefore, is complete and unconditional. For the period of licence, of course, Defendant No.1 would have to make payment of the taxes, cesses, etc. The Plaintiffs Advocate informs the Court that there was no deposit paid by Defendant No.1 at the time of the creation of the licence. Hence, the Plaintiffs have not been able to adjust the amount of taxes from the deposit. Consequently, this Suit is filed essentially for recovery of Rs.45,17,040/- towards the property taxes payable by Defendant No.1 in place of the Plaintiffs in 3 view of the licence agreement. 5.The Plaintiffs, however, have also applied for an injunction restraining Defendant No.2 from taking any coercive action by sealing the suit property or by selling it in auction sale for non-payment of taxes. The relief of injunction is only pending the Suit. It is not essentially a relief which is ancillary to the main relief in the Suit. The Plaintiffs require the Municipal Authority not to take action for non-payment of taxes. That relief cannot be granted. Taxes are required to be paid primarily and essentially by the owners of the property. Taxes however may be paid, consequent upon any specific express agreement between the parties by any other party. Nevertheless, the Municipality is entitled to recover taxes. If the party under the agreement fails to make payment of the taxes, the primary liability of the owners does not and cannot cease. The Municipality is not concerned with the individual agreements of the owners with their parties. If such agreements are entertained, the Municipality would not be entitled to recover taxes. 6.In any event, the agreement between the Plaintiffs and Defendant No.1, which is individual only to themselves, and to which the Municipality is not a party, would subsist until the period of licence. Even the licensed 4 premises has been returned to the owners. Primary liability of the owners does not cease and hence, the Plaintiffs, as the owners, would be liable to make payment of the taxes and recover the same from Defendant No.1. 7.My attention has been drawn to the ad-interim order dated 4.10.2006. Defendant No.1 was represented. Defendant No.1 admitted the liability to pay the dues of Defendant No.2. They, however, disputed the correctness of the amount claimed by Defendant No.2. Since the Plaintiffs have applied for directing Defendant No.1 to deposit in Court the amount claimed in the Suit and Defendant No.2 has disputed the amounts demanded by the Bombay Municipal Corporation, at present, Defendant No.1 cannot be directed to deposit that amount in Court. The Plaintiffs shall, however, be entitled to recover from Defendant No.1 all the amounts paid as and by way of taxes, cesses, levies, penalties, etc. to Defendant No.2 during the period of the licence as per the specific agreement between the Plaintiffs and Defendant No.1 contained in Clause 3-A of the said agreement at the time of the Suit. Subject to this, there shall be no order on the Notice of Motion. No order as to costs. (SMT.ROSHAN DALVI, J.) 5