Case: Delhi Golf Club Ltd  Vs. N D M C

case of necessity. 8. The next ground of challenge is based on the taxability of the property in question in the hands of the appellant-Club. Section 61 of Act enables the Municipal Committee to impose the various categories of tax enumerated therein. The power to levy the house/property tax in question is traceable to Clause (a) which refers to “a tax payable by the owner of building and lands not exceeding fifteen percent of the annual value”. In dealing with this aspect of the matter, the High Court seems to have proceeded on the basis of the definition of the word “owner” with reference to the dictionary and other meanings of the word in its generic sense as also upon the alleged object assumed to be underlying Section 61(1)(a), i.e., to tax all persons who possess and use the land within Municipal limits for the reason that any one possessing land and using the same does make use of Municipal services. Fist of all, the levy is not a fee to be viewed as referable to the availing of Municipal services. Further, the levy envisaged under Section 61(1)(a) is property tax levied qua ownership of the property within the Municipal limits and income therefrom, not a service tax payable for the service rendered to the person in occupation of the land or building. That apart, the Act itself has a definition of its own rendering it unnecessary to delve into general connotation of the word and Section 3(11) defines `owner’ to include the person for the time being receiving the rent of land and building, or either of them, whether on his own account or as agent or trustee for any person or society or for any religious or charitable purpose or who would so receive the same if the land or building were let to a tenant. In contrast, Clause (e) and (ee) of Sub-section (1) of Section 61 specifically enables the levy of tax envisaged therein on the occupier for availing of civic services and amenities. That apart, the proviso to clause (a), in stipulating that in the case of lands and buildings occupied by “tenants in perpetuity” the tax shall be payable by such tenants, declares the legislative intent in specific and unmistakable terms as well as by necessary and inevitable implication that tenants of the category other than `tenants in perpetuity’ are outside the purview of Section 61(1)(a) of the Act. Therefore, no tenant other than one holding a lease in perpetuity can be saddled with any liability to tax qua his status as a mere tenant under Section 61(1)(a) of the Act. Periodical leases with provision therefor and actual such renewals from time- to-time cannot be affixed with the character of leases in perpetuity merely because cumulatively considered the lessee might be in physical possession for long, particularly when there is no vested right of renewal as such in the lessee. The Government of India in the Ministry of Urban Development, the lessor, is the indisputable owner of the property leased in favour of the Club and they have not done anything which could even indicate slightly of the grant of their rights of ownership in favour of the Club. The respondent-Local Authority, therefore, cannot act in a manner which is likely to even cast a cloud around the title, ownership and right to possession of the Government of India. Consequently, the view expressed by the High Court that the Club would constitute `owner’ for purposes of the levy in question, does not either sound to reason or can be said to be in conformity with the statutory provisions in force and, therefore, does not merit our approval. 9. The incidental question that also needs reference and consideration is as to whether the appellant-Club can be held or said to hold the property in question as a ‘tenant in perpetuity’. Even a cursory perusal of the orders sanctioning the lease as well as the terms and conditions of the lease would make it beyond any doubt that the lease in question is merely a tempoary allotment/temporary lease and the further stipulation that any continuance, beyond even the expiry of 20 years for which the temporary lease has been granted shall also be a lease on tempoary basis leaves the matter beyond any controversies whatsoever. The various clauses in the lease deed restricting and regulating the mode and character of enjoyment by the lessee and the specific stipulation reserving absolute power in the lessor to terminate the lease and resume possession as and when required on giving a notice for the stipulated period militates against the lease being characterised as one in perpetuity. In the light of the above, the respondent has no legal authority or jurisdiction to levy the house/property tax against the appellant-Club in its capacity merely as a tenant in respect of the property, which is the subject-matter of the lease. The fact that certain constructions have been put up by the Club or that while so applying to the Municipal Body for permission to put up such constructions, the appellant-Club represented itself to be an owner is besides the point and wholly irrelevant in the matter of consideration of levy and collection of house/property tax on the property of the lease-hold and which is the subject-matter of the lease on the Club qua its position and status as a mere lessee. In respect of the vacant land or land over which constructions have been put up by the owner of the land and all the buildings which were themselves the subject-matter of lease granted in favour of the appellant-Club, the appellant cannot be assessed to house/property tax in question or saddled with any liability therefor. The Club was not in the present case sought to be made liable only in respect of constructions put up by it and held by it during the period of subsistence of the lease. We do not, therefore, decide whether the Club can be made so liable.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. The incidental question that also needs reference and consideration is as to whether the appellant-Club can be held or said to hold the property in question as a ‘tenant inEven a cursory perusal of the orders sanctioning the lease as well as the terms and conditions of the lease would make it beyond any doubt that the lease in question is merely a tempoary allotment/temporary lease and the further stipulation that any continuance, beyond even the expiry of 20 years for which the temporary lease has been granted shall also be a lease on tempoary basis leaves the matter beyond any controversies whatsoever. The various clauses in the lease deed restricting and regulating the mode and character of enjoyment by the lessee and the specific stipulation reserving absolute power in the lessor to terminate the lease and resume possession as and when required on giving a notice for the stipulated period militates against the lease being characterised as one in perpetuity. In the light of the above, the respondent has no legal authority or jurisdiction to levy the house/property tax against the appellant-Club in its capacity merely as a tenant in respect of the property, which is the subject-matter of the lease. The fact that certain constructions have been put up by the Club or that while so applying to the Municipal Body for permission to put up such constructions, the appellant-Club represented itself to be an owner is besides the point and wholly irrelevant in the matter of consideration of levy and collection of house/property tax on the property of the lease-hold and which is the subject-matter of the lease on the Club qua its position and status as a mere lessee. In respect of the vacant land or land over which constructions have been put up by the owner of the land and all the buildings which were themselves the subject-matter of lease granted in favour of the appellant-Club, the appellant cannot be assessed to house/property tax in question or saddled with any liability therefor. The Club was not in the present case sought to be made liable only in respect of constructions put up by it and held by it during the period of subsistence of the lease. We do not, therefore, decide whether the Club can be made so liable.