NAGARPALIKA THAKURDWARA versus KHALIL AHMED & ORS.
[2016] 7 S.C.R. 912, Supreme Court of India, 2016
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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[2016] 7 S.C.R. 912 
NAGARPALIKA THAKURDWARA 
v. 
KHALIL AHMED & ORS. 
(Civil Appeal No. 9822 OF 2016) 
B 
SEPTEMBER 28, 2016 
[ANIL R. DAVE AND L. NAGESWARA RAO, JJ.] 
Code of Civil Procedure, 1908: 
s.102 - Applicability of - Respo11dents, claiming to reside 
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outside the mu11icipal limits of appe/lant-Nagar Palika filed suit 
seeking permane11t i11ju11ction agai11st appellant-Nagar Palika from 
recovery of house tax (less tha11 Rs.25,0001-), thus impliedly praying 
for a declaration that they were 11ot liable to pay a11y tax to appellant-
Nagar Palika - Suit dismissed by trial court - First appeal by 
respo11dents allowed - Second appeal by appellant-Nagar Palika 
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dismissed by High Court holdi11g that claim i11 the seco11d appeal 
was less tha11 Rs.25,0001- a11d thus by virtue of provisio11s of s.102 
110 seco11d appeal would lie whe11 the subject matter of the original 
suit was for recovery of money 11ot exceedi11g Rs,25,0001- - 011 
appeal, held: To avail advantage of s. l 02, subject matter of the 
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origi11al suit should be only recovery of money not exceeding 
Rs.25, 0001- - If the. subject matter of the suit is anything other than 
recovery of mo11ey, s. l 02 cannot be invoked - 111 the i11sta11t case, 
the suit was not only for recovery of money but was for per111a11e11t 
i11ju11ctio11 and a dec/aratio11 also - Provision of s. l 02 11ot applicable 
- Matter remitted to High Court for fresh co11sideratio11 - · Uttar 
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Pradesh Municipalities Act, 1916. 
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s.102 - Purpose behi11d enactment - Held· To reduce quantum 
of litigation so that courts may not have to waste time where stakes 
are very meagre and not of much consequence. 
Allowing the appeal, the Court 
HELD: 1. In the instant case, the suit was not only for 
recovery of money, but it was for a declaration and permanent 
injunction. [Para 13] [915-G) 
2. So as to avail advantage of the provisions of Section 102 
of the CPC, the subject matter of the original suit should be only 
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NAGARPALIKA THAKURDWARA v. KHALIL AHMED & ORS. 913 
recovery of money and that too, not exceeding Rs.25,000/-. If 
the subject matter of the suit is anything other than recovery of 
money or something more than recovery of money, provisions of 
Section 102 of the CPC cannot be invoked. In view of the 
aforestated fact, the provisions of Section 102 of the CPC could 
not have been ap1>lied. [Paras 15, 16) [916-D-E] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9822 
of2016. 
From the Judgment and Order dated 21.09.2011 of the High Court 
of Judicature at Allahabad in Second Appeal Civil Appeal No. 781 of 
2011. 
Aniket Jain, Saurav Aggarwal, Kamlendra Mishra, Advs., for the 
Appellant. 
Gaurav Jain, Ms. Abha Jain, Advs., for the Respondents. 
The Judgment of the Court was delivered by 
ANIL R. DAVE, J. I. 
Leave granted. 
2. Being aggrieved by the Judgment dated 21.9.2011 delivered by 
the High Court of Judicature at Allahabad in Second Appeal No.781 of 
2011, the appellant Nagar Palika has approached this Court by way of 
this appeal. 
3. The facts giving rise to the present litigation in a nutshell are as 
under: 
The respondents, who claim to be residing outside the municipal 
limits ofNagar Palika Thakurdwara, Distrid Moradabad, filed a Civil 
Suit being OS No.13 of 1994 against the appellant in the court of Civi I 
Judge (Junior Division), Thakurdwara, praying for the following reliefs: 
"(a) That the defendant no. I be restrained by decree of permanent 
injunction
that they remain restrained from recovery of alleged 
house tax of Rs.6760/- regarding crusher in question, present 
building no.319 and calendaring factory building no.320 and shops 
in question, building no.321 to 332 respectively which are outside 
the limits of municipality and situated in village Fatehullah Ganj in 
property owned by Plaintiff nos.2 and 3 situated in village 
Fatehullah Ganj and from recovery of Rs.4,246.07 amount 
described in the recovery certificate or more by itself or its agent 
defendant no.2 or by any other medium or be restrained from 
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SUPREME COURT REPORTS 
(2016) 7 S.C.R. 
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imposing any house tax till the pronouncement of the properties in 
question to be within the limits of municipality by the Government 
in either years. 
(b) That the defendant no.1 be ordered to give the cost of the 
present suit to the plaintiff(s). 
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(c) Thatthe relief which is fit in the opinion of the Hon'ble Court 
in favour of the plaintiff(s) be granted." 
Thus, the case of the respondents was that their premises were 
not within the municipal limits of the appellant Nagar Palika and therefore, 
the Nagar Palika had no right to levy any tax on the said prope1ties of 
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the respondents and therefore, the appellant be restrained from recovering 
tax in respect of the said properties from the respondents. The 
respondents had also impliedly prayed for a declaration to the effect that 
they were not liable to pay any tax to the appellant Nagar Palika under 
the provisions of the Uttar Pradesh Municipalities Act, 1916 (hereinafter 
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referred to as 'the Act'). 
4. Written Statement was filed by the appellant stating that the 
premises of the respondents were very much within the municipal limits 
of the Nagar Palika and the said fact was also known to the respondents 
as respondent no. I had also contested an election for being a President 
of the appellant Nagar Palika. Moreover, it was also the case of the 
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appellant that the suit was not maintainable in view of the provisions of 
Sections 143 and 160 of the Act.
5. The said suit was dismissed and therefore, the respondents 
preferred first appeal, being Civil Appeal No.30 of2008, before the Court 
of Additional District Judge, Moradabad, which was allowed by a 
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judgmentdated 19.7.201 l. 
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6. Being aggrieved by the aforesaid judgment dated 19. 7.2011, 
the appellant filed Second Appeal No. 781 of 2011, which has been 
dismissed by the High Cou11 by virtue of impugned judgment and 
therefore, this appeal has been filed by the appellant. 
7. The short reason for which the appeal filed by the appellant 
has been dismissed by the High Court is that the claim in the second 
appeal was less than Rs.25,000/- and by virtue of the provisions of Section 
102 of the Code of Civil Procedure, 1908, no second appeal would lie 
from any decree when the subject matter of the original suit is for 
recovery of money not exceeding Rs.25,000/-.
NAGARPALIKA THAKURDWARA v. KHALIL AHMED & ORS. 915 
[ANIL R. DAVE, J.] 
8. The learned counsel appearing for the appellant submitted that 
the High Court committed an error by not considering the fact that the 
suit had been filed seeking permanent injunction, praying that the appellant 
Nagar Palika should be restrained from recovering any tax under the 
Act from the respondents as the properties belonging to the respondents 
were situated beyond the municipal limits of the appellant Nagar Palika. 
9. The learned counsel further submitted that the High Court only 
considered the amount of tax which was payable at the relevant time, 
which was only Rs.11,006.07, but ig1i'ored the fact that the suit was also 
for a declaration to the effect that the properties of the respondents 
were not within the municipal limits of the Nagar Palika and therefore, 
no tax could have been levied thereon by the appellant. Thus, the suit 
was not only for recovery of money, but was also for a declaration and 
permanent injunction. Moreover, it was also submitted that the suit itself 
was not maintainable in view of the provisions of Sections 140 and 163 
of the Act and therefore, the appeal could not have been allowed by the 
first appellate court. 
10. On the other hand, the learned counsel appearing for the 
respondents submitted that the impugnedj udgment isj ust, legal and proper 
for the reason that by virtue of the second appeal filed by the appellant, 
the appellant wanted to recover
only a sum of Rs.11,006.07 by way of 
tax from the respondents. The learned counsel, therefore, submitted 
that the second appeal deserved to be dismissed. 
11. Upon hearing the learned counsel and looking at the facts.of 
the case and in the light of the legal provisions, we are of the view that 
the High Court ought not to have dismissed the second appeal. 
12. Section l 02 of the Code of Civi 1 Procedure, 1908, reads as 
under: 
"102. No second appeal in certain cases. - No second appeal 
shall lie from any decree, when the subject matter of the original 
suit is for recovery of money not exceeding twenty-five thousand 
rupees". 
13. In the instant case, the suit was not only for recovery of money, 
but it was for a declaration and permanent injunction. Moreover; the 
issue with regard to location of the properties in question had to be 
decided. It was to be ascertained whether the properties were situa~ed 
within the municipal limits of the Nagar Pa.lika and if so, whether the 
appellant was entitled to levy tax thereon under the provisions of the 
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916 
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SUPREME COURT REPORTS 
(2016] 7 S.C.R. 
Act. If the properties were not within the municipal limits of the appellant 
Nagar Palika, the appellant could have been permanently restrained from 
recovering any tax under the Act in respect of the properties in question. 
Thus, several other issues were also to be decided in the said suit. It is 
also pertinent to note that the maintainability of the suit was also 
challenged by the appellant in view of the provisions of the Act. 
14. The purpose behind enactment of Section I 02 of the CPC is 
to reduce the quantum of litigation so that courts may not have to waste 
time where the stakes are very meagre and not of much consequence. 
In the instant case, though apparently the amount which was sought to 
be recovered was Rs.11,006.07, looking at the prayer made in the plaint, 
the consequences of the final outcome of the litigation would be far-
reaching. 
15. So as to avail advantage of the provisions of Section 102 of 
the CPC. the subject matterofthe original suit should be only recovery 
of money and that too, not exceeding Rs.25,000/-. If the subject matter 
of the suit is anything other than recovery of money or something more 
than recovety of money, provisions of Section I 02 of the CPC cannot be 
invoked. 
16. In the instant case, the original suit was not only for recovery 
of money, but was also for a declaration and permanent injunction. In 
view of the aforestatcd fact, the provisions of
Section I 02 of the CPC 
could not have been applied. 
17. In the circumstances, we set aside the impugned judgment 
and remit the matter to the High Cowi so that the Second Appeal can be 
decided afresh after hearing the parties concerned. 
18. As the suit was filed in the year 1994 and possibly no tax 
might have been recovered by the appellant ti II now, we feel that the 
second appeal should be decided at an early date. The parties to the 
litigation shall appear before the High Court on 17.10.2016 and the High 
Court is requested to fix the date for final hearing of the second appeal 
so that the appeal can be finally decided preferably within six months 
from the date of receipt of a copy of this judgment by the High Cami. 
19. The appeal is, accordingly, dis posed of as allowed with no 
order as to costs. 
Divya Pandey 
Appeal allowed.