Case: National &amp; Grindlays Bank Ltd Vs. The Municipal Corporation Of Greaterbombay

(2) (a). In the context of Section 148 (3) the lessor of the premises as mentioned in Section 146 (2) (a) must be construed as to mean the lessor of the land on which the building has been constructed by the tenant. In this connection, reference should be made to Section 147 which provides for an apportionment of responsibility for property tax when the premises assessed are let or sub-let.The language of this sub-section suggests that the lessor of the land has the right of recovering from his tenant the amount of tax which he has paid in excess of the tax which the property is liable to pay on the basis of the rent recovered by the lessor. It is also clear that the intention of the Legislature in fixing the primary liability of property tax upon the owner of the land in a case not falling under Section 146 (3) of the Act is to facilitate the collection of property tax. In the case of a monthly tenant who puts up a temporary shack or asbestos shed on the land and who may at any time terminate the lease at a short notice, it is not always possible for the Corporation to keep track of the lessee and to collect the property tax from him. It is not unreasonable therefore that in a case of this description the Legislature should impose the primary liability for the payment of the property tax upon the lessor of the land and to give him the right of recoupment under Section 147. A similar view with regard to the interpretation of Section 146 of the Act was expressed by a Division Bench of the Bombay High Court consisting of Chagla, C. J. and Shah, J., in Ramji Keshavjis case, (1954) 56 Bom LR l132 (supra).It was held by the learned Judges in that case that the owner of a land had leased it to a tenant for a period of one year and the tenant had put up a structure upon the land, the owner of the land was primarily liable to pay property tax together with the structure constructed thereon. Counsel on behalf of the appellant challenged the correctness of this decision, but for the reasons already expressed we hold that the ratio of this decision is correct.5. We shall, however, assume in favour of the appellant that the meaning of Section 146 (2) of the Act is obscure and that it is possible to interpret it as throwing the primary liability for payment of property tax upon the lessee who has constructed a building on the land.Even upon that assumption we think that the view of the law expressed by the Bombay High Court in this case ought not to be interfered with. The reason is that in a case where the meaning of an enactment is obscure, the Court may resort to contemporary construction, that is the construction which the authorities have put upon it by their usage and conduct for a long period of time.The principle applicable is "optima legum interpres est consuetudo": 2 Co Rep 81. In Ohlsons case, The Queen v. Commrs. of Inland Revenue, (1891) 1 QB 485, 489, in dealing with the interpretation of Section 39 of the Pawnbrokers Act, 1872, Stephen, J., said:"What weighs with me very greatly in coming to the present conclusion is the practice of the Inland Revenue Commissioners for the past sixteen years. So long ago as 1874 this very point was decided by Sir Thomas Henry, for whose decisions we all have very great respect; and the least that can be said with regard to the case before him is that he pointedly called the attention of the commissioners to the case - the learned Magistrate having offered to state a case - an offer refused by the commissioner, who by their refusal must be taken to have acquiesced in the decision. That is a very strong contemporaneous exposition of the meaning of the Act".The same principle was referred to by Lord Blackburn in Clyde Navigation Trustees v. Laird, (1883) 8 AC 658, 670. The question in dispute in that case was whether the Clyde Navigation Consolidation Act, 1858 (repealing eight prior Acts) imposed navigation dues on timber floated up the Clyde in logs chained together. From 1858 to 1882 dues had been levied on this class of timber without resistance from the owners and some Judges in the Court of Session suggested that this non-resistance might be considered in construing the statute. On this point Lord Blackburn said:"I think that submission raises a strong prima facie ground for thinking that there must exist some legal ground on which they (the owners) could not resist. And I think a Court should be cautious, and not decided unnecessarily that there is no such ground. If the Lord President (Inglis) means no more than this when he calls it contemporanea expositio of the statutes which is almost irresistible, I agree with him. I do not think that he means that enjoyment at least for any period short of that which gives rise to prescription, if founded on a mistaken construction of a statute, binds the Court so as to prevent it from giving the true construction. If he did, I should not agree with him, for whom I know of no authority, and am not aware of any principle, for so saying".In our opinion, the principle of contemporanea expositio applies to the present case. The Act was passed in the year 1888 and there appears to be a practice followed by the Bombay Municipal Corporation for a very long time of treating the land and the building constructed upon it as single unit and charging the property tax upon the owner of the land in a case where the land is let for a period of less than one year to a tenant who has constructed a building thereon (see Ramji Keshavjis case, (1954) 56 from LR 1132 (supra) ).

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

Explanation:
0[ds]In our opinion, the argument put forward on behalf of the respondent is well founded and must be accepted as correct. In the first place, the language of Section 146 (2) indicates that the Legislature contemplated that in a case where the land and the building are owned by different persons there should be a composite assessment of property tax. The reason is that in Section 146 (1) and (2) the word premises is used in contrast to Section 146 (3) where the words land and building are separately mentioned. In Section 154 (1) of the Act again, the Legislature uses the expression building or land. Then Section 155 provides for the right of the Commissioner to call information from, the owner or the occupier in order to enable him to determine the rateable value of any building or land and the person primarily liable for the payment of any property tax levied in respect thereof. Section 156 provides that the Commissioner shall maintain a book to be called the assessment book which book is to contain among other things a list of all lands and building.Therefore, the scheme of Section 146 is that when the land is let and the tenant has built upon the land, there should be a composite assessment of tax upon the land and building taken together. We are further of opinion that in the case of such a composite unit the primary liability of assessment of tax is intended to be on the lessor of the land under Section 146 (2) (a) of the Act.We shall, however, assume in favour of the appellant that the meaning of Section 146 (2) of the Act is obscure and that it is possible to interpret it as throwing the primary liability for payment of property tax upon the lessee who has constructed a building on the land.Even upon that assumption we think that the view of the law expressed by the Bombay High Court in this case ought not to be interfered with. The reason is that in a case where the meaning of an enactment is obscure, the Court may resort to contemporary construction, that is the construction which the authorities have put upon it by their usage and conduct for a long period of time.The principle applicable is "optima legum interpres est consuetudo": 2 Co Rep 81. InOhlsons case, The Queen v. Commrs. of Inland Revenue, (1891) 1 QB 485,489, in dealing with the interpretation of Section 39 of the Pawnbrokers Act, 1872, Stephen, J.,weighs with me very greatly in coming to the present conclusion is the practice of the Inland Revenue Commissioners for the past sixteen years. So long ago as 1874 this very point was decided by Sir Thomas Henry, for whose decisions we all have very great respect; and the least that can be said with regard to the case before him is that he pointedly called the attention of the commissioners to the case - the learned Magistrate having offered to state a case - an offer refused by the commissioner, who by their refusal must be taken to have acquiesced in the decision. That is a very strong contemporaneous exposition of the meaning of thesame principle was referred to by Lord Blackburn in ClydeNavigation Trustees v. Laird, (1883) 8 AC 658,The question in dispute in that case was whether the Clyde Navigation Consolidation Act, 1858 (repealing eight prior Acts) imposed navigation dues on timber floated up the Clyde in logs chained together. From 1858 to 1882 dues had been levied on this class of timber without resistance from the owners and some Judges in the Court of Session suggested that this non-resistance might be considered in construing the statute. On this point Lord Blackburnthink that submission raises a strong prima facie ground for thinking that there must exist some legal ground on which they (the owners) could not resist. And I think a Court should be cautious, and not decided unnecessarily that there is no such ground. If the Lord President (Inglis) means no more than this when he calls it contemporanea expositio of the statutes which is almost irresistible, I agree with him. I do not think that he means that enjoyment at least for any period short of that which gives rise to prescription, if founded on a mistaken construction of a statute, binds the Court so as to prevent it from giving the true construction. If he did, I should not agree with him, for whom I know of no authority, and am not aware of any principle, for so saying".In our opinion, the principle of contemporanea expositio applies to the present case. The Act was passed in the year 1888 and there appears to be a practice followed by the Bombay Municipal Corporation for a very long time of treating the land and the building constructed upon it as single unit and charging the property tax upon the owner of the land in a case where the land is let for a period of less than one year to a tenant who has constructed a building thereon (see Ramji Keshavjis case, (1954) 56 from LR 1132 (supra) ).