B.L Gupta v. Municipal Corporation Of Delhi .

Madan B. Lokur, J.:— Two second appeals arise out of a common judgement and decree dated 29th May, 1985 passed by the learned Additional District Judge in RCA No. 159/1985 and RCA No. 157/1985. For the sake of convenience, this Regular Second Appeal ‘being RSA No. 107/1985 was taken up as the main case.

2. The question of law framed for consideration on 11th September, 1985 reads as follows:—

Whether the limitation for filing the suit for injunction against the Municipal Corporation of Delhi in respect of assessment of property for a particular year has to be computed under Section 478(2) of the Delhi Municipal Corporation Act or whether Article 113 of the Limitation Act would be applicable to the case?

3. Section 478 of the Delhi Municipal Corporation Act, 1957 (the Act) reads as follows:—

478. Notice to be given of suits.—

(1) No suit shall be instituted against the Corporation or against any municipal authority or against any municipal officer or other municipal employee or against any person acting under the order or direction of any municipal authority or any municipal officer or other municipal employee, in respect of any act done, or purporting to have been done, in pursuance of this Att or any rule, regulation or bye-law made thereunder until the expiration of two months after notice in writing has been left at the municipal office and, in the case of such officer, employee or person, unless notice in writing has also been delivered to him or left at his office or place of residence, and unless such notice states explicitly the cause of action, the nature of the relief sought, the amount of compensation claimed, and the name and place of residence of the intending plaintiff, and unless the plaint contains a statement that such notice has been so left or delivered.

(2) No suit, such as is described in sub-Section (1), shall unless it is a suit for the recovery of immovable property or for a declaration of title thereto, be instituted after the expiry of six months from the date on which the cause of action arises.

(3) Nothing in sub-section (1) shall be deemed to apply to a suit in which the only relief claimed is an injunction of which the object would be defeated by the giving of the notice or the postponement of the institution of the suit.

4. The Appellant was assessed to property tax in respect of plot No. 231, Okhla Industrial Estate, Phase-III, New Delhi. The rateable value was fixed at Rs. 7,480/- per annum for the period from 1972-1973 onwards.

5. The Respondent sought to upwardly revise the rateable value and, therefore, issued a notice dated 30th March, 1977 under Section 126 of the Act. This notice came back unserved with the report that no such person is available at the given address.

6. The relevant portion of Section 126 of the Act reads as follows:—

126. Amendment of assessment list.- (1) The Commissioner may, at any time, amend the assessment list—

(a) by inserting therein the name of any person whose name ought to be inserted; or

(b) by inserting therein any land or building previously omitted; or

(c) by striking out the name of any person not liable for the payment of property taxes; or

(d) by increasing or reducing for adequate reasons the amount of any rateable value and of the assessment thereupon; or

(e) by making or cancelling any entry exempting any land or building from liability to any property tax; or

(f) by altering the assessment on the land or building which has been erroneously valued or assessed through fraud, mistake or accident; or

(g) by inserting or altering an entry in respect of any building erected, re-erected, altered or added to, after the preparation of the assessment list:

Provided that no person shall by reason of any such amendment become liable to pay any tax or increase of tax in respect of any period prior to the commencement of the year in which the notice under sub-section (2) is given.

(2) Before making any amendment under sub-section (1) the Commissioner shall give to any person affected by the amendment, notice of not less than one month that he proposes to make the amendment and consider any objections which may be made by such person.

(3) xxx xxx xxx

(4) xxx xxx xxx

7. Some time on 7th April, 1977, the Appellant visited the offices of the Respondent and on that date, he was given the notice proposing to fix the rateable value of the property at Rs. 1,47,800/- per annum with effect from 1st April, 1976 on account of construction on the plot.

8. The Appellant filed his objections dated 29th April, 1977 on behalf of M/s Vulcan Industries, of which he was a partner. The objections were rejected by the Respondent and the Appellant was informed by a letter dated 3rd September, 1979 that the rateable value of the property had been fixed at Rs. 1,47,800/- per annum with effect from 1st April, 1976.

9. M/s. Vulcan Industries filed an appeal before the learned Additional District Judge but that appeal was dismissed on the ground that it was not filed by the assessee, that is, the Appellant.

10. The Appellant was then served with a demand dated 31st December, 1979 for property tax due from him for the year 1979-1980 and arrears for the previous years. This led the Appellant to file Suit No. 254/1980 before the learned Sub Judge First Class. The suit was dismissed on the ground that it was barred by time. Feeling aggrieved, the Appellant filed RCA No. 159/1985 challenging the dismissal of his suit. The dismissal of the first appeal resulted in the filing of this appeal.

11. Thereafter, the Appellant received a bill assessing his property to tax for the period 1980-1981 to 1982-1983. This bill was on the basis of the rateable value earlier arrived at by the Respondent. The Appellant challenged this demand by filing Suit No. 358/1982 in the Court of the learned Sub Judge First Class. This suit was decreed by the learned Sub Judge and the demand was set aside on the ground that the rateable value had not been fixed in accordance with law. Feeling aggrieved, the Respondent filed RCA No. 157/1985 which came to be dismissed by the impugned judgement and decree.

12. Consequently, the two appeals before me are, one filed by the Appellant who is aggrieved by the fact that his suit was dismissed as time barred and the second by the Respondent who is aggrieved by the decree quashing the demand for the years 1980-1981 to 1982-1983 as not sustainable.

13. The submission of learned counsel for the Appellant was that the notice dated 30th March, 1977 was received by him only on 7th April, 1977 and, therefore, it could not have been acted upon for the period from 1st April, 1976 to 31st March, 1977. Therefore, the demand based on this was illegal. It was further submitted that since the action taken by the Respondent was not in accordance with the Act, the provisions of Section 478(2) of the Act were not applicable. He submitted that if the action of the Respondent is held to be in accordance with law, then the period of limitation would be six months as prescribed by Section 478(2) of the Act. But if it is held that the action of the Respondent was not in accordance with law, then the period of limitation for challenging that action would be three years as prescribed by Article 113 of Schedule I to the Limitation Act, 1963.

14. The question, therefore, is whether the notice issued on 30th March, 1977 was valid or not inasmuch as it was served on the Appellant only on 7th April, 1977.

15. Learned counsel for the Appellant relied upon Niagara Hotels & Builders (P) Ltd. v. UOI & Ors., 65 (1997) DLT 826 and Mst. Memoona Bi v. MCD, 1974 Municipalities and Corporation Cases 407 to contend that the shorter period of limitation is applicable only if action is taken by the Respondent in accordance with law and if Section 478(1) of the Act does not come into picture. There can be no doubt about this proposition because Section 478(2) of the Act specifically states that the shorter period of limitation will apply only to actions taken under Section 478(1) of the Act.

16. Another decision relied upon by learned counsel for the Appellant, that is, Lucky Star Estates (India) Pvt. Ltd. v. DDA, 113 (2004) DLT 802 (DB) deals with a similar proposition but under the Delhi Development Act, 1957. Therefore, this decision also does not take us very much further in deciding the controversy raised.

17. Recently, a learned Single Judge of this Court held in MCD v. A.K Trakaru and Anr., 2004 (73) DRJ 546 that giving of a notice under Section 126 of the Act is equivalent to receipt of that notice. In other words, once the notice is out of the hands of the Respondent, it is as good as having been received by the assessee for the purposes of Section 126 of the Act and the crucial date would not be the actual date of receipt of the notice but its date of dispatch. In coming to this conclusion, reliance was placed upon MCD v. Ram Kishan Khandelawl, 101 (2002) DLT 169. This being the view taken by two learned Judges of this Court, and I respectfully agree with them, the action taken by the Respondent cannot be said to be de hors the Act but within its confines. Consequently, the period of limitation would have to be calculated on the basis of Section 478(2) of the Act. In other words, the Appellant was required to file a suit within a period of six months of the cause of action arising and not within a period of three years as per Article 113 of Schedule I to the Limitation Act, 1963.

18. In so far as the present appeal is concerned, the rateable value was fixed on 3rd September, 1979 and the demand notice was issued on 31st December, 1979. The suit was filed some time in July, 1980, that is, beyond the period of six months prescribed by Section 478(2) of the Act. Consequently, it must be held that both the Courts below have correctly come to the conclusion that Suit No. 254/1980 was barred by time.

19. Consequently, there is no reason to interfere with the impugned order in so far as Suit No. 254/1980 is concerned. The appeal of the Appellant being RSA No. 107/1985 is dismissed. The question framed for consideration is answered by saying that the limitation period is as per Section 478(2) of the Act and Article 113 of Schedule I of the Limitation Act is not attracted.

20. In so far as Suit No. 358/1982 is concerned, that was decreed on the basis that the notice dated 30th March, 1977 issued to the Appellant under Section 126 of the Act was received by him only on 7th April, 1977 and, therefore, could not be acted upon. However, since I have held, in view of the judgements mentioned above, that the notice must be taken to have effect from 30th March, 1977, the basis on which the decision has been taken by both the Courts below against the Respondent must fall through.

22. Consequently, in so far as Suit No. 358/1982 is concerned, the matter will have to be tried by the learned Trial Court since the suit was admittedly filed within time. The judgement and decree passed in this suit is, therefore, set aside and the parties should appear before the learned Trial Court on 17th January, 2005 for further proceedings.

23. Both the appeals are disposed of as above. No costs.