Case: Commr.Of Dum Dum Muncipality  Vs. Indian Tourism Development Corpn

40. This appeal is preferred against the interlocutory order dated 24-3-1995 pending writ appeal. As stated hereinabove, the learned Single Judge had allowed the writ petition filed by the Authority and held that the Bombay Municipal Corporation cannot levy any property taxes upon the property held by the Authority. The Municipal Corporation preferred an appeal against the said order wherein the Division Bench directed the Authority to pay a part of the demand pending disposal of the appeal. It is that order which is questioned in this appeal by the Authority. Having regard to our decision in the matters relating to Delhi and Calcutta, this appeal is liable to be dismissed. It is accordingly dismissed herewith. It is evident that the writ appeal pending in the Bombay High Court is liable to be allowed in the light of this judgment. It is open to the Bombay Municipal Corporation to bring this judgment to the notice of the High Court and have the appeal disposed of. No costs.

Reasoning:
We are, however, of the opinion that the nature and character of vesting should not be determined with reference to the preamble and sub-section (1) of Section 16 alone but on a totality, i.e., on a conspectus of the provisions of the Act. Section 3(2) says that the authority shall be a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property both moveable and immovable, and entitled to enter into contracts. It can sue and is liable to be sued in its own nameThese several provisions make it clear that the Authority is a distinct juristic entity, having its own properties, fund and employees, and that it is capable of borrowing from any source including from Government of India. The Act expressly makes the Authority liable to pay income tax like any other company and its income arises mainly from the properties vested in it. This fact coupled with the fact that there are no words of restriction in Section 12 does establish conclusively that the properties vested in it under Section 12 - properties which were hitherto owned by the Union of India - cease to be the properties of the Union of India and that the said vesting is neither restricted nor temporary. The vesting is no doubt for ensuring better management of airports but the said purpose underlying the creation of the Authority cannot be read as a restriction or as a ground for curtailing the meaning of vesting23. So far as Section 33 is concerned, it is a temporary measure - a regulatory manner - which has to be taken whenever it is found necessary in public interest. If the Central Government is of the opinion that in public interest, it is necessary or expedient so to do, it can direct the Authority to entrust the management of any airport to the person or persons appointed by it who shall manage the same for the limited period specified in the section subject to and under the orders of the Central Government. At the end of such period, the management of the airport reverts back to the Authority. Similarly, Section 34 provides for supersession of the authority in certain situations, viz., in a grave emergency where the authority is unable to discharge its functions or duties or where the authority has persistently made default in complying with any direction issued by the Central Government as a result of which the financial position of the authority or the administration of the authority has deteriorated or where the circumstances exist which renders it in the public interest so to do. This is another instance of control vested in the Central Government to ensure proper and efficient functioning of the Authority. The Authority can be superseded only for a period not exceeding six months which can, however, be extended for a further period of six months - but not beyond. These are the usual regulatory provisions found in such enactments and in enactments dealing with cooperative societies and panchayat raj institutions24. Great emphasis was laid upon clause (c) of sub-section (2) of Section 34 which provides that on supersession of the Authority under sub-section (1)l property owned or controlled by the Authority shall, until the Authority is reconstituted under sub-section (3), vest in the Central. This provision, according to the learned counsel, points out the ephemeral nature of vesting of properties of the Union of India in the Authority and is inconsistent with the theory of absolute vesting propounded by the respondents. We are not impressed. It may be seen that once an Authority is superseded under Section 34(1), there is, in law, no Authority. In such a situation, provision has to be made with respect to the properties hitherto vesting in the Authority and clause (c) of sub-section (2) is precisely the provision providing for it. Evidently, Parliament did not wish to vest the properties in the person or persons appointed to manage the affairs of the Authority for a limited period. It is for that reason that the said clause says that during the period of supersession such properties vest in the Central Government which get re-vested in the Authority once it is reconstituted. Indeed, it is suggested by Shri Chatterji, learned counsel appearing for the Dum Dum Municipality that if the properties did never vest in the Authority and had always remained the properties of the Union of India, there was no occasion for clause (c) to say that the properties owned or controlled by the Authority vest in the Union for the said limited period. We need not, however, express any opinion on this submission27. There is yet another difficulty in the way of accepting the appellants submission. The submission logically means that only those properties which are vested by the Central Government in the Authority on the date of its constitution alone will continue to be the properties of the Union. But so far as the properties which have been acquired or constructed after that date by the Authority would be its own properties. It may happen that the properties which have been vested in the authority at its inception have been rebuilt, improved, expanded and developed beyond recognition. How is one to draw the line and where ? Such a distinction would not only be artificial but difficult to operate in practice. The annual report published by the Authority from year to year discloses how the Authority has understood the vesting. A copy of the annual report 1988-89 is placed before us which shows that the Authority claims to be the owner of all the properties without making any distinction between those that were vested in it at its inception and those which have been acquired and/or constructed later. It has also claimed depreciation on all the properties under Section 32 of the Income Tax Act which can be claimed only by the owner of the properties. We are not suggesting that the understanding of the Authority is conclusive on the question. Far from it. The issue has really to be decided on the basis of the provisions of the Act. We referred to the said aspect only to show how the Authority and Union of India have understood the legal position and acted upon it over a period of more than two decades30. In our opinion, these letters and/or the certificate do not represent a decision within the meaning of Section 12(3) since that sub-section seems to contemplate a dispute between the Union of India and the Authority. No such dispute ever existed. Secondly it cannot bind any of the Municipal Corporations concerned herein for the reason that they were not heard before rendering the said decision. Yet another feature of these letters and certificate is that they do not draw a distinction between properties transferred by the Union of India to the Authority and the properties acquired and/are controlled by the Authority after its constitution. According to the Central Government, all the properties of the Authority are really the properties of the Union - a stand which is not taken by the appellants even35. For all the above reasons, we are of the opinion that the International Airports Authority of India is a statutory corporation distinct from the Central Government and that the properties vested in it by Section 12 of the Act cannot be said to have been vested in it only for proper management. After the date of vesting, the properties so vested are no longer the properties of the Union of India for the purpose of and within the meaning of Article 285. The vesting of the said properties in the Authority is with the object of ensuring better management and more efficient operation of the airports covered by the Act. Indeed that is the object behind the very creation of the Authority. But that does not mean that it is a case of limited vesting for the purpose of better management. The Authority cannot, therefore, invoke the immunity created by Article 285(1) of the Constitution. The levy of property taxes by the relevant municipal bodies is unexceptionable36. In view of our conclusion in the preceding para, it is unnecessary to go into the other question raised, viz., whether the municipality can levy tax upon the building where it cannot levy tax upon the land upon which the building stands37. The Calcutta High Court has expressed a view that not all the land in the possession of the ITDC (pursuant to the licence granted to it by the Authority) is within the limits of the Dum Dum Municipality. Since this finding appears to be not based on any definite material, we leave this question open for decision by the appropriate authorities at the appropriate stage. In any such proceedings, the finding of the High Court aforesaid shall not operate as res judicata