- 1 - IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.460 OF 1998 1. Shri U.R.Acharya, ) 2. Mrs.Ramadevi, ) both of Mumbai, ) Indian Inahabitant, residing ) at 37/38, Pankaj Mansion, ) 8, Dr.Annie Besant Road, Worli, ) Mumbai - 400 018. ) Versus 1. State of Maharashtra, ) 2. The Maharashtra Housing and ) Area Development Authority, ) having its office at ) Griha Nirman Bhawan, ) Bandra (East), Mumbai 400 051. ) 3. The Bombay Housing and Repair ) Cess Board, having its office ) at 89/95, Tardeo Mansion, ) Mumbai 400 024. ) 4. The Municipal Corporation of ) Greater Bombay, having its ) office at Shahid Bhgat Road, ) Near Reserve Bank of India, ) Fort, Mumbai - 400 001. )..Respondents -- S/Shri R.M.Nakhwa along Vasant Dhawan for the petitioners. Ms Geeta Shastri, AGP for the Respondent Nos.1 to 3. Smt.S.M.Modale for the Respondent No.4. -- CORAM : SRI R.M.S.KHANDEPARKAR & SRI A.A.SAYED, JJ - 2 - DATED : 9TH JULY, 2008 ORAL JUDGMENT : ( PER SRI R.M.S.KHANDEPARKAR,J ) ORAL JUDGMENT : ( PER SRI R.M.S.KHANDEPARKAR,J ) ORAL JUDGMENT : ( PER SRI R.M.S.KHANDEPARKAR,J ) 1. Heard. The petitioners by this petition challenge the orders dated 23rd February, 1993 and 20th October, 1997 rejecting the claim of the petitioners for exemption of the petitioners’ building from the liability to pay cess under the Maharashtra Housing and Area Development Act, 1976, hereinafter called as "MHADA". The challenge is on the ground that in terms of Section 83(1)(j), the petitioners’ building being exclusively used for non residential purposes since 1985 onwards, the petitioners are entitled for exemption from payment of cess in relation to the said building. It is their further contention that the expenditure which was sought to be incurred for repairs of the building in question by the board was during the period from the year 1972 to 1977, and therefore, the respondents are not entitled to deny the exemption by taking resort to Sub-section (2) of Section 83 as was in force till 15th May, 1998. It is their case that the expression "at any time" in relation to such expenditure which was there in Sub-section (2) of Section 83 could not relate to expenditure incurred prior to 1985. Secondly that the - 3 - challenge is on the ground that the provisions of law comprised under Sub-section (2) of Section 83 of MHADA would be attracted only in cases where there are structural repairs carried out at the costs of the Board and in the case in hand, the impugned orders nowhere disclose that the expenditure incurred by the Board was in relation to the structural repairs to the building in question. 2. The few undisputed facts relevant for decision in the matter are that the petitioners are the owners of the building situate in the property bearing Survey No.A-1889, A Ward, Welcome House, 257, Shahid Bhagatsingh Road, Mumbai. Earlier the building belonged to the uncle of the petitioners by name Shri N.V.Baliga. Under a Gift Deed dated 26th June, 1986, the said Baliga gifted the said property to the petitioners. During the period from 1972-77 the building was subjected to repairs. However, the expenditure to the tune of Rs.2,16,466/- incurred for such repairs was reimbursed by the respondent No.3. The building was further subjected to repairs under Phase II in the year 1983. However, the expenditure in that regard was incurred by the erstwhile owner, and there was no reimbursement of such expenditure by the Board. - 4 - 3. Under an application dated 23rd August, 1985, the uncle of the petitioners Shri N.V.Baliga claimed exemption from payment of repair cess and requested that the building be decessed. It was followed by the correspondence between the petitioners and the respondents and ultimately under the letter dated 20th October, 1997 the respondents informed the petitioners that in terms of provisions of law comprised under Section 83(2) of the MHADA, their application for exempting the building from payment of cess cannot be granted and hence rejected the application. Pursuant thereto, the present petition was filed. At the time of admission, the respondents were restrained from levying or collecting any repair cess in respect of the said building till disposal of the petition. It however appears that the respondent No.4 had meanwhile served a notice upon the petitioners asking the petitioners to pay cess amount of Rs.9,06,914/- besides penalty amount of Rs.1,12,421/- for the period from 1st April, 1989 to 30th September, 1998. 4. While assailing the impugned orders, the learned counsel appearing for the petitioners submitted that Section 83(1)(j) of MHADA clearly entitles the petitioners to claim exemption from - 5 - payment of cess as it is not in dispute that since 1985 the building is being exclusively used for non residential purposes. 5. On the other hand, it is the contention on behalf of the respondents that it is not sufficient that the building is being used for non residential purposes but in order to claim such exemption, the building should also satisfy requirement of Sub-section (2) of Section 83 of the MHADA inasmuch as that such a building should not be subjected to repairs at the cost of the Board. 6. Section 83(1)(j) of MHADA provides that the land and place which are enumerated therein shall be exempted from payment of cess and clause (j) refers to a building exclusively used for non residential purposes. Obviously, therefore, the buildings which are exclusively used for commercial purposes would be exempted from payment of cess in terms of Section 83(1) of MHADA. Sub-section (2) of Section 83, which was in force till 15th May, 1998, however, provided that "notwithstanding anything contained in sub-section (1), if a building is deemed to be structurally repaired at any time by the Board under this Act, then that building, after such repairs shall - 6 - not be exempt or entitled to be exempt from payment of the cess under any of the clauses (i), (j), (k) or (l) of that sub-section." Obviously, therefore, mere satisfaction of requirement of clause (j) of Sub-section (1) of Section 83 of MHADA was not sufficient to claim exemption from the liability to pay cess for the period prior to 16th May, 1998 but such building ought to have been the one which was not subjected to structural repairs, the expenditure whereof was made or reimbursed by the Board. 7. It is further contention of the learned advocate for the petitioners that Sub-section (2) of Section 83(j) would be attracted only in cases where repairs are found to have been carried out during the period for which exemption is claimed for and in the case in hand, undisputedly the repairs at the cost of the Board were carried out during the period from 1972-77 i.e. prior to 1985 and the period for which no exemption has been claimed. Being so, according to the learned for the petitioners, Sub-section (2) of Section 83 could not be attracted to the case in hand. 8. As already seen above, Sub-section (2) specifically states that the expenditure by the Board for repairs of the building could be "at any time". - 7 - In other words, Sub-section (2) nowhere specifies that the repairs at the cost of the Board have necessarily to be during the period for which exemption is claimed. It could even prior to such period. This is further clear from the expression used in the said Section to the effect that such building subjected to repairs at any time by the Board shall not be entitled for exemption "after such repairs". In other words, if the expression "at any time" and "after such repairs", are properly understood while reading the said provision of law, it would be at once clear that it has been specifically provided under the said statutory provision that once the Board had incurred the expenditure for repairs of the building, then such a building after such repairs would not be entitled for exemption from the payment of cess under any of the clauses which are specifically mentioned in Sub-section (2) with reference to Sub-section (1). Sub-section (2) specifically refers to clause (j) of Section 83(1). Evidently therefore, exemption on the ground that the building is exclusively used for non residential purposes would not be available in cases where the building was at any time subjected to repairs at the cost of the Board. Once any building was repaired at the cost of the Board, after such repairs, such building would not be entitled to claim - 8 - exemption even though the building might have been exclusively used for non residential purposes. 9. It is also sought to be contended that the provisions under Sub-section (2) having been repealed, the same would take effect from the date of enforcement of the statute itself and therefore the case of the petitioner would have to be considered as if Sub-section (2) never existed on the statute book. In that regard, reliance is placed in the decision of the Apex Court in the matter of Vijay v. State of Vijay v. State of Vijay v. State of Maharashtra & Ors., Maharashtra & Ors., Maharashtra & Ors., reported in (2006)6 SCC 289 and of the learned Single Judge of this Court in the matter of Pragji Vrindavan Premises Co-operative Society Pragji Vrindavan Premises Co-operative Society Pragji Vrindavan Premises Co-operative Society Ltd., Bombay and another v. State of Maharashtra and Ltd., Bombay and another v. State of Maharashtra and Ltd., Bombay and another v. State of Maharashtra and others, others, others, reported in AIR 2002 Bombay 6. 10. Sub-section (2) of Section 83 was sought to be deleted by the Act No.16 of 1998. Section 2 of the said Act No.16 of 1998 reads thus:- "2. In Section 83 of the Maharashtra Housing and Area Development Act, 1976 (hereinafter referred to as "the Principal Act"), - - 9 - (a) in sub-section (1), after clause (o), the following clause shall be added, namely :- "(p) building which is subjected to repairs amounting to reconstruction as certified by Mumbai Corporation." (b) sub-section (2) shall be deleted." 11. By a Notification dated 15th May, 1998, the State Government specified 15th May, 1998 to be the date for enforceability of the Act No.16 of 1998. In other words, from 15th May, 1998, sub-section (2) of Section 83 stood deleted from MHADA. Neither the Act No.16 of 1998 nor any other provision of law is disclosed to us which could give retrospective effect to such repeal of sub-section (2) of Section 83. 12. The decision of the Apex Court in Vijay’s case Vijay’s case Vijay’s case (supra), (supra), (supra), while considering the interpretation of statute, it was observed that "the general rule that a statute shall be construed to be prospective has two exceptions: It should be expressly so stated in the enactment or inference in relation thereto becomes evident by necessary implication." In the matter - 10 - before the Apex Court, it was relating to the issue about retrospective enforceability of Section 14(1)(J-2) of Bombay Village Panchayats Act, 1958. While considering the same, it was held that the said amendment came into force with effect from 8th August, 2003. However, it was stated expressly that the amendment would apply also to a case where the elected candidate had been elected as a member of the Panchayat earlier thereto. The Apex Court further observed that "by introducing the said provision, the legislature, inter alia, intended that for the purpose of bringing grassroot democracy, a person should not be permitted to hold two posts created in terms of the Constitution (73rd Amendment) Act. It is true that ordinarily a statute is construed to have prospective effect, but the same rule does not apply to a disqualifying provision." That is not the case in the matter in hand. It relates to the applicability of exemption from payment of cess and such a provision unless specifically provided by the Legislature cannot be construed to be retrospective. 13. It is then sought to be contended on behalf of the petitioners that in order to attract sub-section (2), there should be structural repairs to the building by the Board. In the case in hand, the - 11 - impugned order nowhere discloses that the repairs carried out to the building were of the nature of structural repairs. 14. At the outset, it is to be noted that at no point of time before the authority, the petitioners had raised any dispute that the expenditure which was incurred during the period from 1972-1977 to the tune of Rs.2,16,466/- was not related to the structural repairs. There are no facts pleaded in the petition which could reveal that the repairs which were carried out during the period from 1972-1977 were not structural repairs. It was however sought to be contended that the averments in paragraph 27(e) of the petition which related to the issue of structural repairs were never denied and therefore, it is to be presumed that the respondents have not disputed the claim of the petitioners that the repairs which were carried out during the period from 1972-1977 were not structural repairs. In that connection, attention is drawn to the affidavit-in-reply filed by the respondents. The paragraph 27(e) of the petition reads thus:- "27(e) It is submitted that the next serious legal infirmity in the impugned orders is that - 12 - even if the building is repaired once by the Board then that building shall not be entitled to exemption. In this behalf, Sub-section (2) of Section 83 if read properly and as a whole contemplates repairs and that too structural repairs. The structural repairs may dis-entitle the owner from grant of exemption. However, other repairs not falling within the ambit of structural repairs do not dis-entitle the owner from claiming exemption under Sub-section (1) of Section 83. In this behalf, it is submitted that the authorities have not concluded that any structural repairs have been carried out. Secondly, there is no material to show that the structural repairs are carried out by the Board. Thirdly, if no amount is reimbursed to the owner in the second phase of the repairs carried out in the year 1983, then the Petitioners failed to understand as to how they are not entitled to exemption when all the conditions contemplated by Clause (j) of Section 83(1) are fulfilled in their case. Therefore, the impugned orders are wholly unsustainable in law and deserve to be quashed and set aside." - 13 - 15. At the outset, it is to be noted that the paragraph 27(e) does not contain any statement of fact as such. It merely relates to the submissions on behalf of the petitioners on the basis of the provisions comprised under Section 83(2) of MHADA. It is settled law that for the purpose of considering the pleadings of the parties in relation to the statements of fact the provisions of Orders VII and VIII of the Code of Civil Procedure are always to be borne in mind with the provisions of Order XIX thereto. It cannot be disputed that if a statement of fact made in the petition is not denied or controverted by the respondents, the Court is empowered to presume that the fact alleged by the petitioners is either admitted or established to be true. Nevertheless, nothing prevents the Court from insisting the petitioners to prove the claim in relation to such fact. That apart, same rule would not apply in case of submissions made on the point of law even though they are elaborately pleaded in the petition. The respondents are not expected in their affidavit in reply to deny the submissions made on behalf of the party in the petition. The Order XIX Rule 1 of the Code of Civil Procedure clearly provides that the affidavit has to contain the statement of facts and not of law. - 14 - 16. If one peruses the contents of paragraph 27(e) of the Petition, it would at once be clear that the same are the submissions based on the provisions of law comprised under Section 83(2) of MHADA. There is however no factual foundation laid in the petition to substantiate those submissions. The submissions without the basis of factual data are of no help to decide any issue and much less in a writ jurisdiction. Being so, merely because the content of paragraph 27(e) are not denied or disputed by the respondents, that would not lead to a conclusion that the respondents have admitted the claim of the petitioners that the repairs carried out during the period from 1972 to 1977 were not the structural repairs. Besides, it was necessary for the petitioners to raise proper dispute in that regard before the authority and to invite clear finding in that regard from the authority. It is not permissible to invite an order in that regard without raising the issue which requires adjudication by fact finding authority. 17. As regards the decision of the learned Single Judge in Pragji Vrindavan Premises Co-operative Pragji Vrindavan Premises Co-operative Pragji Vrindavan Premises Co-operative Society Ltd.’s case (supra) Society Ltd.’s case (supra) Society Ltd.’s case (supra), there was no dispute raised that for the period for which exemption was claimed, Sub-section (2) was not in force and on that - 15 - assumption the claim for exemption was allowed. It has no application to the facts of the case in hand. 18. Considering the facts and circumstances of the case, it would, therefore, be clear that for the period for which exemption was claimed, the petitioners would not be entitled for such exemption. Undoubtedly, in view of repeal of Sub-section (2) of Section 83 of MHADA, the petitioners would be entitled to claim exemption from 16th May, 1998. The learned advocate for the respondents is justified in contending that there is no deemed exemption available to the party. In order to claim exemption, the party has to file proper application and the authority has to decide the same in accordance with the provisions of law. In case there is no dispute about the use of building that it is used for non residential purposes, the question of building being subjected to payment of cess after 16th May, 1998 cannot arise. 19. For the reasons stated above, therefore, the contention of the petitioners that they would be entitled for exemption in question for payment of cess for the period prior to 16th May, 1998 cannot be accepted. - 16 - 20. Though the petitioners are not entitled for the said exemption for the period prior to 16th May, 1998, we certainly do not appreciate the conduct on the part of the respondent No.4 in issuing demand notice in the year 2000 and that too along with the claim of amount of penalty. It is undisputed fact that by an order dated 22nd June, 1998, there was a stay granted in the matter and, therefore, the respondents could not have issued such notice. At the same time, it is not in dispute that the respondents have not sought to execute the demand notice till this date. However, in view of the fact that the recovery was stayed by the Court, there is no question of imposing penalty as such. Needless to say that on account of delay in payment of cess, the respondents would be entitled to claim interest at the reasonable rate, as the recovery was stayed by this Court at the instance of the petitioners. 21. In the circumstances, therefore, while allowing the petition holding that the petitioners would not be entitled for exemption prior and upto 15th May, 1998 from the payment of cess in relation to the said building, it is declared that the petitioners would not be liable to pay such cess from 16th May, 1998. As regards the arrears of cess, the petitioners - 17 - shall be liable to pay the same within a period of six months from today along with interest at the rate of 10% per annum. 22. The rule is made absolute accordingly with no order as to costs. ( R.M.S.KHANDEPARKAR, J ) ( A.A.SAYED, J )