IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 14TH DECEMBER 2009 / 23RD AGRAHAYANA 1931 OP.No. 10562 of 2002(G) ---------------------------------- PETITIONER: ------------------- P.R.DINESH, S/O.RAMACHANDRA RAO, AGED 37 YEARS, RESIDING AT FLAT NO.405 & 406, PIONEER SHOPPING COMPLEX BUILDING, MARINE DRIVE, SHANMUGHOM ROAD, ERNAKULAM. BY ADVS. MR.K.K.CHANDRAN PILLAI, MR.GIGIMON ISSAC. RESPONDENTS: ------------------------ 1. THE CORPORATION OF KOCHI, REPRESENTED BY ITS SECRETARY, ERNAKULAM. 2. M/S.PIONEER SHOPPING COMPLEX (P) LTD., MARINE DRIVE, ERNAKULAM, REPRESENTED BY ITS MANAGING DIRECTOR SATISH KUMAR MITTAL. R1 BY SMT.A.G.ANEETHA, SC, COCHIN CORPN. , R2 BY ADVS. MR.P.RADHAKRISHNAN, MR.MADHU RADHAKRISHNAN, MR.K.P.PADMAKUMAR. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 14/12/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P. NO.10562/2002-G: ORDER ON C.M.P. NO. 18662/2002 IN O.P. NO. 10562/2002-G CLOSED 14/12/2009. SD/- S.SIRI JAGAN, JUDGE. APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE LAWYER NOTICE DTD. 25/01/97. EXT.P.2: COPY OF THE REPLY DTD. 22/02/97. EXT.P.3: COPY OF THE REPLY DTD. 19/04/1997. EXT.P.4: COPY OF THE JUDGMENT DTD. 05/11/99 N C.M.A. 131/1998. EXT.P.5: COPY OF THE DEMAND NOTICE DTD. 19/01/2002 ISSUED BY THE R.1. EXT.P.6; COPY OF THE DEMAND NOTICE DTD. 19/01/2002 ISSUED BY THE R.1. EXT.P.7: COPY OF THE REPRESENTATION DTD. 19/01/2002 GIVEN TO THE R.1. RESPONDENTS' DOCUMENTS: DOCUMENT 1: COPY OF THE TRANSFER OF UNDIVIDED SHARES DTD. 24/02/1996. DOCUMENT 2: COPY OF THE TRANSFER OF UNDIVIDED SHARES DTD. 02/06/2006. DOCUMENT 3: COPY OF THE CONSTRUCTION AGREEMENT DTD. 28/12/1994. DOCUMENT 4: COPY OF THE CONSTRUCTION AGREEMENT DTD. 06/07/1995 WITH Y.V. RAJESH. DOCUMENT 5: COPY OF THE CONSTRUCTION AGREEMENT DTD. 06/07/1995 WITH P.V. YEGNESWARAN. DOCUMENT 6: COPY OF THE TERMS AND CONDITIONS OF ALLOTMENT OF FLATS. //TRUE COPY// P.A. TO JUDGE. Prv. S.SIRI JAGAN, J. ================== O.P.No. 10562 of 2002 ================== Dated this the 14th day of December, 2009 J U D G M E N T The petitioner entered into an agreement with the 2nd respondent for purchase of 2 adjacent flats in a building complex viz., Pioneer Towers in the Marine Drive in Ernakulam city. The petitioner was put in possession of the flats and he has been continuing occupation of the same continuously ever since, even now. Since, according to the petitioner, the 2nd respondent made illegal demands for amounts, which is not due as per the agreement between the parties and since the 2nd respondent refused to execute a sale deed as per the original agreement, insisting on incorporation of certain additional clauses in the sale deed, to which, the petitioner and other similarly placed owners of flats objected, suits were filed, which are pending consideration of the civil court. While so, the petitioner was served with a demand for property tax by the Cochin Corporation under the Kerala Municipalities Act, which was addressed to the 2nd respondent. Ext.P5 is the demand made in this regard for the periods from 1995-96 to 2001-02. Although Ext.P6 also has been served on the petitioner, according to the petitioner, Ext.P6 is not relating to the petitioner's flats. According to the petitioner, Ext.P5 property tax has been demanded as if the flats owned by the petitioner are commercial buildings. According to the petitioner, only the ground floor, the first o.p.10562/02 2 floor and the second floor of the building complex in which the flats are situated, are commercial spaces and the construction above the 2nd floor consists of purely residential flats. The petitioner submits that the petitioner's flats are in the 5th floor of the building and are exclusively used for residential purposes only. Therefore, the petitioner submits that the petitioner is not liable to pay property tax at the rate applicable to commercial buildings. In addition to that, penal interest also has been demanded from the petitioner. According to the petitioner, before assessing building tax, the petitioner was not issued with any notice whatsoever and the entire proceedings were initiated by the Corporation apparently assuming that the 2nd respondent is the owner of the building and the 2nd respondent did not take appropriate steps to contest the matter, since apparently he was unaffected by the same. 2. Although the petitioner originally argued for the position that until the civil court conclusively decided the question on the title of the flats in question, the petitioner should not be made to pay any property tax, the petitioner would now contend that the petitioner is prepared to pay the amounts correctly assessed at the rate applicable to residential buildings subject to the right of the petitioner to claim reimbursement of the said amount from the 2nd respondent, if ultimately, in the civil suits pending, it is found that the 2nd respondent o.p.10562/02 3 is the actual owner of the building, in so far as the liability to pay property tax is primarily on the owner of the building. The petitioner, therefore, seeks the following reliefs: “i) Call for all records relating to this case and peruse the same. ii) Issue a writ in the nature of certiorari or such other appropriate writ, order or direction quashing EXHIBIT P5 and all proceedings pursuant there to taken by the 1st respondent for recovery of the said amount by proceeding against the petitioner and his assets. iii) To issue a writ in the nature of mandamus or such other appropriate writ order or direction, directing the 1st respondent to consider and pass appropriate orders on EXHIBIT - P7 representation after hearing the petitioner. iv) To issue a writ in the nature of mandamus or such other appropriate order or direction commanding the 1st respondent not to proceed against the petitioner and his asset for recovery of any amount by way of property tax or building tax on the basis of EXHIBIT - P5 or such other orders till the legal liability of the petitioner and extent of his liability is determined by the competent Court.” 3. This Court by order dated 5.3.2007 ordered as follows: “Since the 2nd respondent is claiming title and petitioner's occupancy of the building is only under interim orders of Civil Court, there will be direction to Cochin Corporation to recover entire arrears of tax from the 2nd respondent and file report of compliance in this court within two weeks.” It is summited that pursuant to the same, some amounts have been paid by the 2nd respondent. 4. The respondents have filed separate counter affidavits. According to the Corporation, the Corporation cannot be prejudiced because of the suits pending between the petitioner and the 2nd respondent regarding the title to the flats. In so far as the property o.p.10562/02 4 tax is a statutory liability in respect of the building in question, either the petitioner or the 2nd respondent shall pay the property tax, failing which distress action can be taken by the Corporation against the building itself for recovery. It is also contended by them that the property tax has been assessed in respect of the flats in question, after issuing due notice to the 2nd respondent and therefore, the contention of the petitioner that he has not been issued with any notice is of no consequence. 5. The 2nd respondent, with the help of a counter affidavit would contend that they are the owners of the flats. 6. I have considered the rival contentions in detail. 7. In so far as civil suits are pending before the civil court regarding the title to the flats, I do not think it proper to go into that question in this original petition. However, I am of opinion that till the suits are finally disposed of, either the petitioner or the 2nd respondent has to pay property tax due. However, if the petitioner is using the building in question for residential purposes only, I do not think that it is just and proper to permit the Corporation to realise the property tax from the petitioner at commercial rates. Therefore, I am of opinion that the Corporation should reassess the property tax in respect of the building in question afresh, after affording an opportunity of being heard to the petitioner. The counsel for the 2nd respondent would o.p.10562/02 5 contend that he is also entitled to be heard. Even assuming that he is entitled to be heard, that shall only be on the question of quantum of the property tax and not regarding the title, which should be left to be decided in the civil suits pending. The Corporation is not expected to decide the inter se dispute between the petitioner and the 2nd respondent relating to the title to the flats in question. 8. Taking into account all the above facts and the circumstances of the case, I dispose of this original petition with the following directions: Ext.P5 is quashed. The 1st respondent is directed to reassess the property tax due on the flats in question afresh after affording an opportunity of being heard to the petitioner as well as the 2nd respondent. But I make it clear that the Corporation is not expected to hear any objections regarding the inter se dispute between the petitioner and the 2nd respondent regarding the title to the property. Objections, if any of the petitioner and the 2nd respondent shall be heard only on the question of quantum of property tax payable in respect of the flats in question. After assessment, an appealable order shall be served on the petitioner and the 2nd respondent subject to the right of the petitioner to challenge the order in appeal. The petitioner shall pay the amounts so demanded. Such demand would be subject to the result of the civil suits pending between the petitioner and the 2nd o.p.10562/02 6 respondent and orders in an appeal which may be filed by the petitioner challenging such assessment. If ultimately in the civil suits it is found that the 2nd respondent is the owner of the building, it would be open to the petitioner to initiate appropriate proceedings to recover the amounts of property tax so paid by the petitioner pursuant to the above proceedings. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge S.SIRI JAGAN, J. ================== O.P.No. 10562 of 2002-G ================== J U D G M E N T 14th December, 2009