1 fa219group.sxw ssp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELATE JURISDICTION FIRST APPEAL NO.219 OF 2010 Ravi Dyes and Dyestuffs Co.Pvt.Ltd ...Appellant vs. Pune Municipal Corporation & Anr ...Respondents ALONG WITH FIRST APPEAL NO.1930 OF 2009 Phool Investments Pvt.Ltd. ...Appellant vs. The Pune Municipal Corporation & Anr...Respondents ALONG WITH FIRST APPEAL NO.138 OF 2010 C.A.P.A. (I) Pvt.Ltd. ...Appellant vs. The Pune Municipal Corporation & Anr...Respondents Mr.Vineet Naik i/b Mr.S.R.Ronghe for the appellant in all appeals Mr.A.P.Kulkarni for the respondent nos.1 and 2 in all appeals CORAM : A.S.OKA,J. DATE : SEPTEMBER 2 and 8, 2011 ORAL JUDGMENT : 1 The parties were put to notice that these appeals will be taken up for final hearing at admission stage. The appeals are being disposed of by a common judgment and order as the controversy involved in the appeals is more or less similar. The suits have been filed by the Appellant against the Respondent No.1 Corporation, which is a 2 fa219group.sxw corporation constituted under the Bombay Provincial Municipal Corporation Act, 1949 (hereinafter referred to as the said Act ). The dispute is as regards the assessment of rateable value and the demand for the Municipal Taxes in respect of various premises in a building known as Godrej Millennium standing on plot No. 9, CTS No.12/1, Koregaon, Pune, 411 001. The prayer made in the suits filed by the Appellants in these appeals is for declaration that the enhancement of rateable value made and the demand made by issuing bills of the property taxes is illegal, ultra-vires, bad in law, null and void and actuated with mala-fides. In these appeals, there are applications filed for interim relief as well as for leading additional evidence. 2 The averments made in all the three suits are more or less identical. Therefore, for the sake of convenience, a reference is made to the facts of Special Civil Suit no.676 of 2003 (First Appeal no. 219 of 2010). It is the case made out by the appellant that the appellant-company is having its office at office premises no.4 admeasuring 267.74 sq. meters on the ground floor of the building known as Godrej Millennium on plot no.9, C.T.S no.12/1, Koregaon, Pune 411 001. The office premises no.4 has been described as the suit premises. It is contended that the appellant purchased the suit premises by registered agreement dated 24 th April 2001 and since then the appellant is in possession thereof. It is contended that in the year 2001, Annual Rateable Value (for short ARV) was fixed and determined by the respondent-Pune Municipal 3 fa219group.sxw Corporation at Rs.57,550/-. It is stated that on 6 th June 2003 the appellant received impugned bill dated 27 th April 2003 in the sum of Rs.30,27,707/- which was inclusive of arrears of Rs.19,79,252/-. According to the appellant, for the first time the appellant came to know that the ARV was enhanced to Rs.13,23,750/- from Rs.57,550/-. It is contended that the bill was issued in breach of provisions of Taxation Rules in Chapter III of Schedule of the said Act. It is submitted that the respondent- Corporation failed to serve the special assessment notice as contemplated under Rule 15(2) of the Taxation Rules. It is submitted that entries in the assessment book could not have been altered and rateable value could not have been enhanced without service of special notice to the appellant. Therefore, it is submitted that the bill is vitiated and is null and void. 3 The respondent-Corporation filed written statement in the aforesaid suit raising various contentions. One of the contentions is that in view of availability of efficacious remedy of preferring an appeal under section 406, the Civil Court had no jurisdiction to entertain and try the suit. It was contended that when the property was inspected on 31 st August 2001, the Tax Inspector found that Suzlon Energy Ltd was in possession of the suit premises. It was contended that when special notice dated 18 th December 2001 in the name of the appellant was attempted to be served, it was not accepted and therefore, it was pasted on the suit premises. As the appellant failed to take objection within 15 4 fa219group.sxw days from the date of service of notice, rateable value was fixed on the basis of the hypothetical rent of the suit premises at Rs.60/- per sq. foot per month. 4 The bill amounts in each case are different. As far as special civil suit no. 120/2003 (First Appeal no.1930 of 2009) is concerned, the case made out in the written statement is that when concerned Inspector visited the suit premises on 31 st August 2001, the Max New York Life Insurance Company Limited was found to be in possession of the suit premises. It was contended that when the special assessment notice dated 18 th December 2001 attempted to be served, the same was accepted by one Ashutosh Deshpande for the recorded owner. In special civil suit no.677 of 2003 (F.A.No.138/2010), the contention raised in the written statement is that the plaintiff company had let out the suit premises to M/s.Suzlon Energy Limited. A letter dated 1 st October 2001 was issued to the said company and information in respect of the area, rent etc was called for. By a letter dated 5 th October 2001, the said company declined to give any information. It was stated that the special notice dated 13 th December 2001 was issued in the name of the appellant was pasted on the suit premises as the same was not accepted. Even in these two suits a contention was raised that the Civil Court had no jurisdiction as remedy under section 406 of the said Act was available. 5 After the parties adduced evidence, the learned 5 fa219group.sxw Trial Judge held that the Civil Court had no jurisdiction to entertain and try the suits in as much as a remedy was available under section 406 of the said Act to prefer a statutory appeal. The learned Trial Judge accepted the case made out by the respondent-Corporation that the special notice was served. The learned Trial Judge relied upon the admission of the witness Swadeshkumar Sharma examined by the appellant. 6 The learned counsel for the appellant has taken the Court through the pleadings, notes of evidence and other relevant documents on record. He submitted that in all the three cases, the bills as well as alleged special notices incorporate the name of the appellant and therefore, the contention that the notice of transfer was not served to the Corporation has no basis. He pointed out that in two cases where it is alleged that the special notice was not accepted, the burden was on the respondent-Corporation to prove that the service of special notice was attempted to be made, but the service was not accepted. He submitted that there was no evidence of refusal to accept. He submitted that in one of the three cases, the contention is that the one Ashutosh Deshpande received a notice on behalf of the recorded owner. He submitted that specific case made out in the deposition of the witness examined by the appellant is that the said Ashutosh Deshpande had no concern with the appellant. He invited the attention of the Court to various provisions of the Taxation Rules. He submitted that the special notice contemplated by 6 fa219group.sxw Sub Rule 2 of Rule 15 of Taxation Rules is not shown to have been served to the appellant. He submitted that in all these cases the rateable value was substantially increased and therefore, the service of special notice was mandatory. He submitted that even assuming that by virtue of availability of remedy under section 406 of the said Act, the jurisdiction of the Civil Court is ousted by necessary implication, as the case made out by the appellant is that the bills are null and void, the Civil Court has jurisdiction to entertain the suits. His submission is that in appeal under section 406 of the said Act, the Judge will have no jursidiction to decide the issue raised in the suits. He invited the attention of the Court to the averments made in the application for additional evidence filed in this application. He pointed out that the averments made in the application for amendment of the plaint filed in this appeal. He pointed out that apart from the suit premises there are other office premises in the same building. Except in case of the appellants, in respect of the other premises in the building, ARV has been calculated at the rate of Rs.1.96 per sq ft per month and only in case of appellant the ARV has been calculated at the rate of Rs.45.87 per sq ft per month. He submitted that the said applications are supported by the documentary evidence showing that the ARV is much less in respect of the similar office premises in the same building. He submitted that the said documents show complete arbitrariness on the part of the respondent in fixing the rateable value at exorbitant rate. He submitted that the said documents show the manner in 7 fa219group.sxw which the respondent-Corporation is acting. He has also made submissions on the merits of assessment of the revised rateable value. The learned counsel for the respondent supported the impugned Judgments and decrees. 7 I have carefully considered the submissions. Before dealing with the factual aspects, a reference will have to be made to the relevant provisions of the said Act as well as relevant provisions relating to assessment of ARV contained in Taxation Rules forming part of Chapter VIII of the schedule D of the said Act. Rules 15 to 19 are relevant for the purposes of these appeals which read thus: 15. Time for filing complaints against valuations to be publicly announced. (1) The Commissioner shall, at the time and in the manner prescribed in rule 13, give public notice of day, not being less than fifteen days from the publication of such notice, on or before which complaints against the amount of any rateable value entered in the ward assessment-book will be received in his office. (2) In every case, in which any premises have for the first time been, entered in the assessment-book as liable to the payment of property-taxes, or in which the rateable value of any premises liable to such payment has been increased, the Commissioner shall, as soon as conveniently may be after the issue of the public notice under sub-rule (1), give a special 8 fa219group.sxw written notice to the owner or occupier of the said premises specifying the nature of such entry and informing him that any complaint against the same will be received in his office at any time within fifteen days from the service of the special notice. 16.Time and manner of filing complaints against valuation. (1) Every complaint against the amount of any rateable value entered in the assessment-book or against the mention of the name of any person as primarily liable for the payment of property taxes or against the treatment of any building or land as liable to be assessed to the general tax must be made by written application to the Commissioner which shall be left at his office on or before the day or the latest day fixed in this behalf in the public or special notice aforesaid. (2) Every such application shall set forth briefly but the fully grounds on which the valuation is complained against. 17.Notice to complainants of day fixed for investigating their complaints. The Commissioner shall cause all complaints so received to be registered in a book to be kept for this purpose and shall give notice in writing, to which complainant, of the day, time and place when and whereat his complaint will be investigated. 18.Hearing of complaint. (1) At the time and place so fixed, the 9 fa219group.sxw Commissioner shall investigate and dispose of the complaint in the presence of the complainant, if he shall appear, and, if not, in his absence. (2) For reasonable cause, the Commissioner may from time to time adjourn the investigation. (3) When the complaint is disposed of, the result thereof shall be noted in the book of complaints kept under rule 17 and any necessary amendment shall be made in accordance with such result in the assessment-book. 19.Authentication of ward assessment-books when all complaints have been disposed of. (1) When all such complaints, if any, have been disposed of and the entries required by clause (3) of rule 9 have been completed in the ward assessment-book, the said book shall be authenticated by the Commissioner, who shall certify, under his signature, that except in the cases, if any, in which amendments have been made as shown therein, no valid objection has been made to the rateable values entered in the said book. (2) Thereupon the said ward assessment-book, subject to such alterations as may thereafter be made therein under the provisions of rule 20 shall be accepted as conclusive evidence of the amount of each property-tax leviable on each building and land in the ward in the official year to which the book relates. (underline supplied) Under Sub Rule 2 of Rule 15, if the rateable value of any premises is increased, the Commissioner is required to give a special written notice to the owner/occupier specifying the nature of such entry and informing him that any complaint against the same will be received within 15 days from the 10 fa219group.sxw service of special notice. 8 Sections 472, 473 and 474 of the said Act read thus : 472. Notices, etc by whom to be served or presented. Notices, bills schedules, summonses and other such documents required by this Act or by any rule, regulation or bye-law to be served upon or issued or presented or given to any person, shall be served, issued, presented or given by municipal officers or servants or by other persons authorised by the Commissioner in this behalf. 473.Service how to be effected on owners of premises and others persons. When any notice, bill, schedule, summons or other such documents is required by this Act, or by any rule, regulation or bye-law to be served upon or issued or presented to any person, such service, issue or presentation shall, except in the cases otherwise expressly provided for in section 474, be effected- (a) by giving or tendering to such person the said notice, bill, schedule, summons or other documents; or (b) If such person is not found, by leaving the said notice, bill, schedule, summons or other documents at his last known place of abode in 11 fa219group.sxw the City, or by giving or tendering the same to some adult member or servant of his family, or by leaving the same at his usual place of business, if any, or by giving or tendering the same to some adult employee, if any, of his at such place; or (c) if such person does not reside in the City and his address elsewhere is known to the Commissioner by forwarding the said notice, bill, schedule, summons or other document to him by post under cover, bearing the said address; or (d) if none of the means aforesaid be available, by causing the said notice, bill, schedule summons or other documents to be affixed on some conspicuous part of the building or land, if any, to which the same relates. 474. Service on owner or occupier of premises how to be effected. When any notice, bill, schedule, summons or other such document is required by this Act, or by any rule, regulation or bye-law, to be served upon or issued or presented to the owner or occupier of any building or land, it shall not be necessary to name the owner occupier therein, and the service, issue or presentation thereof shall be effected, not in accordance with the provisions of the last preceding section, but as follows, namely - (a) by giving or tendering the said notice, bill, schedule, summons or other document to the 12 fa219group.sxw owner or occupier, or if there be more than one owner or occupier, to any one of the owners or occupiers of such building or land; or (b) if the owner or occupier or no one of the owners or occupiers is found, by giving or tendering the said notice, bill, schedule, summons or other document to some adult member or servant of the family of the owner or occupier of any of the owners or occupiers; or (c)if none of the means aforesaid be available by causing the said notice, bill, schedule, summons or other document to be affixed on some conspicuous part of the building or land to which the same relates. Thus, mode of service by affixing is recognized by the sections 473 and 474 of the said Act. 9 Now, it will be necessary to make a reference to section 406 which reads thus : 406. Appeals when and to whom to lie (1) Subject to the provisions hereinafter contained, appeals against any rateable value or tax fixed or charged under this Act shall be heard and determined by the Judge. (2) No such appeal [shall been entertained] unless- (a) it is brought within fifteen days after the accrual of the cause of complaint; (b) in the case of an appeal against a 13 fa219group.sxw rateable value a complaint has previously been made to the Commissioner as provided under this Act and such complaint has been disposed of; (c) in the case of an appeal against any tax [including interest and penalty imposed] in respect of which provision exists under this Act for a complaint to be made to the Commissioner against the demand, such complaint has previously been made and disposed of; (d) In the case of an appeal against any amendment made in the assessment book for property taxes during the official year, a complaint has been made by the person aggrieved within fifteen days after he first received notice of such amendment, and his complaint has been disposed of; (e) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value [the amount of the disputed tax claimed from the appellant or the amount of the tax chargeable on the basis of the disputed rateable value, up to the date of filing, the appeal has been deposited by the appellant with the Commissioner]. Clause (a) of section 406 requires an appeal to be filed within fifteen days after the accrual of the cause of complaint. Clause (b) contemplates the appeal to be preferred against the decision on the complaint by the commissioner. On plain reading of section 406, an appeal is available against a 14 fa219group.sxw demand made by a bill demanding property taxes. Section 407 is also relevant which deals with cause of complaint. Section 407 reads thus : 407. Cause of complaint when to be deemed to have accrued. For the purposes of section 406, cause of complaint shall be deemed to have accrued as follows, namely: (a) in the case of an, appeal against a rateable value, on the day when the complaint made to the Commissioner against such value is disposed of; (b) in the case of an appeal against any tax referred to in clause (c) of sub section (2) of the said section on the day when the complaint against the tax is disposed of by the Commissioner; (c) in the case of an appeal against any amendment made in the assessment book for property taxes during the official year, on the day when the complaint made to the Commissioner by the person aggrieved against such amendment is disposed of; (d) in the case of an appeal against a tax not covered by clause (b) above on the day when payment thereof is demanded or when a bill therefore is served. 10 Before going to the factual aspects, a reference will have to be made to the law laid down by the Apex Court in case of NDMC Vs. Satish Chand (deceased) by L.R. Ram Chand [(2003) 10 SCC page 15 fa219group.sxw 38]. This was a case where the Apex Court dealt with the provisions of section 84 and 86 of the Punjab Municipal Act,1911 which provided for an Appeal against assessment or levying of any tax under the said Act. The issue which arose before the Apex Court was whether in view of the availability of statutory appeal, jurisdiction of the Civil Court is ousted. The Apex Court made a reference to its earlier decision of the larger bench in case of Dhulabhai Vs. State of M.P. (AIR 1969 SC 78). In paragraph 6 to 8, the Apex Court held thus : 6. It will be noticed from the provisions contained in Section 9 of the Code of Civil Procedure that a bar to file a civil suit may be express or implied. An express bar is where a statute itself contains a provision that the jurisdiction of a civil court is barred e.g. the bar contained in Section 293 of the Income Tax Act, 1961. An implied bar may arise when a statute provides a special remedy to an aggrieved party like a right of appeal as contained in the Punjab Municipal Act which is the subject-matter of the present case. Section 86 of the Act restrains a party from challenging assessment and levy of tax in any manner other than as provided under the Act. A provision like this is the implied bar envisaged in Section 9 CPC against filing a civil suit. In Raja Ram Kumar Bhargava v. Union of India this Court observed: (SCC p. 689, para 19) “Generally speaking, the broad guiding considerations are that wherever a right, not pre-existing in common law, is created by a statute and that statute itself provided a machinery for the enforcement of the right, both the right and the remedy having been created uno flatu and a finality is intended to the result of the statutory proceedings, then, even in the absence of an exclusionary provision the civil court's jurisdiction is impliedly barred. If, however, a right pre-existing in common law is recognized by the statute and a new statutory remedy for its enforcement provided, without expressly excluding the civil court's jurisdiction, then both the common law and the statutory remedies might become concurrent remedies leaving open an element of election to the persons of inherence. To what extent, and 16 fa219group.sxw on what areas and under what circumstances and conditions, the civil court's jurisdiction is preserved even where there is an express clause excluding their jurisdiction, are considered in Dhulabhai case.” 7. Munshi Ram v. Municipal Committee, Chheharta was a case under the Punjab Municipal Act itself. The Court was considering the question of bar created under Sections 84 and 86 of the Act regarding hearing and determination of objections to levy of provisional tax under the Act. In this connection it was observed: (SCC pp. 88-89, paras 22-23) “22. From a conjoint reading of Sections 84 and 86, it is plain that the Municipal Act, gives a special and particular remedy for the person aggrieved by an assessment of tax under the Act, irrespective of whether the grievance relates to the rate or quantum of tax or the principle of assessment. The Act further provides a particular forum and a specific mode of having this remedy which is analogous to that provided in Section 66(2) of the Indian Income Tax Act, 1922. Section 86 forbids in clear terms the person aggrieved by an assessment from seeking his remedy in any other forum or in any other manner than that provided in the Municipal Act. 23. It is well recognized that where a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be