Bombay High Court
State Of Maharashtra And Ors. vs Nirlon Synthetic Fibres And Chemicals ... on 7 July, 1992
Equivalent citations: (1992)94BOMLR526
JUDGMENT M.L. Pendse, J.
1. This is an appeal preferred by the State of Maharashtra to challenge judgment dated June 29, 1989 delivered by the learned Single Judge in Writ Petition No. 2526 of 1982. By the impugned order, the learned Judge set aside the order passed by the Appellate Authority on October 7, 1982 and directed the Government to redetermine the blocks in which the lands covered by the respondent Company are situated and to refix the standard rates of non-agricultural assessment thereof. The learned Judge further directed that the exercise should be carried out by strictly abiding to the requirements of the Maharashtra Land Revenue Code and the Conversion Rules and the Government shall afford to the Company the opportunity of raising objections against the proposed blocks and standard rates of the non-agricultural assessment. The learned Judge also gave certain other directions.
The Government is aggrieved by two directions of the learned Judge. The first is that while forming blocks under Section 111 of the Maharashtra Land Revenue Code, 1966, it is incumbent upon the Collector to give notices to the individual land owners to raise objections against the proposed demarcation of blocks to satisfy the requirements of principles of natural justice. The second ground on which the decision of the learned Single Judge is challenged is the finding that the revised assessment shall be effective only from July 27, 1981 and not from August 1, 1979. To appreciate the grievance of the State Government, it is necessary to set out few facts.
2. The respondent No. 1 is a public limited Company incorporated under the Companies Act and owns various lands situated at village Pahadi, Goregaon, Bombay. The lands held by the Company are liable to payment of non-agricultural assessment under the Maharashtra Land Revenue Code. Chapter VII of the Code deals with assessments and settlement of land revenue of lands used for non-agricultural purposes and on March 31, 1979, Sections 113, 114 and 116 forming part of Chapter VII were amended. Maharashtra Land Revenue (Conversion of Use of Land and Non-Agricultural Assessment) Rules, 1969, were notified by the State Government in exercise of powers conferred by Section 328 of Maharashtra Land Revenue Code. On July 27, 1981, the State Government published in the Government Gazette Notification setting out standard rates of non-agricultural assessment per square metre applicable to non-agricultural lands in each of the blocks which were demarcated under Section 113 of the Code. The Notification, inter alia, recites that the standard rates of the non-agricultural assessment so fixed will come into force with effect from August 1, 1979 and would remain in operation for a period of 12 years therefrom.
On December 15, 1981, the Company was served with three orders, each dealing with different groups of lands and fixing the non-agricultural assessment payable in respect thereof in pursuance of the rate fixed under the Notification. The Company preferred appeals against the orders before the Deputy Collector (Appeals), Bombay, but by order dated October 7, 1982 the appeals were dismissed. The Company, thereupon, preferred writ petition under Article 226 of the Constitution to challenge the revision of non-agricultural assessment and for direction that it should be payable from August 1, 1979.
3. The learned Single Judge, by the impugned order, held that the Collector was required to maintain elaborate data and make use of it for the purpose of dividing the lands into blocks on the basis of the market value of the lands, due regard being had to the situation of the lands. The learned Judge held that the Collector was also required to take into consideration the non-agricultural purpose for which the lands were used and the advantages and disadvantages attaching thereto. From the material produced before the learned Judge, it was noticed that the Collector had failed to maintain the data required under the provisions of the Code. The learned Judge held that without complying with the requirements of maintaining the record, fixation of market value and the non-agricultural assessment on that basis was entirely unjustified. The learned Judge also held that it is not open for the State Government to revise the non-agricultural assessment with effect from August 1, 1979 when a Notification was published only on July 27, 1981. The learned Judge observed that the Collector cannot form the blocks under Section 111 of the Code without observing the principles of natural justice by giving notice to each of the land holders and inviting objections, if any. The decision of the learned Single Judge is under challenge.
4. As mentioned hereinabove, Mr. Sawant, learned Counsel appearing on behalf of the appellants, raised two contentions in support of the appeal. The learned Counsel made it clear at the outset that in accordance with the directive issued by the trial Court the Government of Maharashtra had undertaken fresh exercise for determination of assessment and the Government is not desirous of challenging the direction for fixation of fresh assessment by strictly complying with the requirements of the Rules. The first grievance made by Mr. Sawant against the judgment of the trial Court is the finding that the Collector cannot divide urban areas into blocks in accordance with Section 111 of the Code without giving prior intimation to each of the land holders and hearing their objections. Mr. Sawant submitted that the principles of natural justice cannot be stretched to such an extent as to make impossible the performance of legislative functions. There is considerable merit in the submission of the learned Counsel. Section 109 of Chapter VII of Maharashtra Land Revenue Code prescribes that the non-agricultural assessment of lands shall be determined with reference to use of the land for non-agricultural purposes and having regard to urban and non-urban areas in which the lands are situated. Section 111 reads as follows:
The Collector shall divide urban areas into blocks on the basis of the market value of lands, due regard being had to the situation of the lands, the non-agricultural purposes for which they are used, and the advantages and disadvantages attaching thereto.
Mr. Sawant submitted, and, in our judgment, with considerable merit, that division of urban areas into blocks is a function carried out by the Collector as part of the legislative exercise. Mr. Sawant also contended that the legislature has given directions or guidelines under Section 111 to the Collector as to how the blocks should be formed and what circumstances should be taken into consideration. Mr. Sawant is right in submitting that the exercise has to be carried out after every ten years and it is impossible to expect the Collector to serve notices upon millions of land holders in the urban area and hear their objections for formation of blocks. Indeed, the inclusion of a particular land in a block does not finally determine the liability of the land holder to pay the non-agricultural assessment. Rule 18 of Maharashtra Land Revenue (Conversion of Use of Land and Non-agricultural Assessment) Rules, 1969, provides that the actual assessment on individual plots in each block shall be fixed by the Collector on the basis of the standard rate for the time being in force in that block. It is open for the holder of the individual plot to raise objection about inclusion of his land in a particular block at the stage when the Collector fixes non-agricultural assessment in respect of individual plots. It is, therefore, totally unnecessary for the Collector to serve notices on each of the land holders before constituting blocks under Section 111 of the Code. The Collector has been given specific direction as to how to form the blocks. The blocks are to be formed on the basis of the market value of the land, due regard being had to the situation of the land, the non-agricultural purposes for which the lands are used and the advantages and disadvantages attaching thereto.
The reliance by Mr. Sawant on two decisions of the Supreme Court in support of the submission is very appropriate. In Union of India and Anr. v. Cynamide India Ltd. and Anr. , while examining the issue as to price fixation under the Essential Commodities Act, the Supreme Court observed that price fixation is neither the function nor the forte of the Court and the Legislature has decreed the pricing policy and prescribed the factors which should guide the determination of the price. The Supreme Court then observed that legislative action, plenary or subordinary, is not subject to rules of natural justice. The Supreme Court held that price fixation is generally a legislative activity. It was then observed-
In the case of subordinate legislation, it may happen that Parliament may itself provide for a notice and for a hearingthere are several instances of the Legislature requiring the subordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal ratein which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. Occasionally, the Legislature directs the subordinate legislating body to make 'such enquiry as it thinks fit' before making the subordinate legislation. In such a situation, while such enquiry by the subordinate legislating body as it deems fit is a condition precedent to the subordinate legislation, the nature and the extent of the enquiry is in the discretion of the subordinate legislating body and the subordinate legislation is not open to question on the ground that the enquiry was not as full as it might have been.
In a later decision of the Supreme Court in Sundarjas Kanyalal Bhathija and Ors. v. The Collector, Thane, Maharashtra and Ors. , the principle was reiterated. In view of the decisions of the Supreme Court, it is obvious that the Collector is exercising subordinate legislative function while forming the blocks in the urban area for the purpose of levying of non-agricultural assessment and, consequently, the principles of natural justice do not come into play. In our judgment, the finding of the trial Judge on this aspect, therefore, cannot be sustained.
5. The second contention urged by Mr. Sawant is that the non-agricultural assessment was settled by Notification dated July 27, 1981 and such assessment was payable with effect from August 1, 1979. The learned Counsel urged that the trial Judge was in error in holding that the revised non-agricultural assessment is payable only from the date of Notification and not from August 1, 1979. It is not possible to accede to the submission of the learned Counsel. It is not in dispute in the present case that the non-agricultural assessment was settled in the year 1975. Section 113 of the Code provides that the standard rate of non-agricultural assessment shall remain in force for a period of ten years and shall then be liable to be revised. The period often years is the guaranteed period. After an amendment of Section 113, Sub-section (2) provides that duration of first such guaranteed period shall be twelve years commencing on August 1, 1979. The amended Sub-sections (2A) and (2B) of Section 113 read asunder:
(2A) Where the standard rate of non-agricultural assessment in any block in any urban area has been fixed or revised before the 1st day of August 1979, such standard rate shall be deemed to be due for revision at any time on and after that date.
(2B) Where the standard rate of non-agricultural assessment is fixed or revised for any guaranteed period, the same shall be revised as soon as possible after the commencement of the next guaranteed period and such revised rate shall be deemed to have come into force with effect from the commencement of such next guaranteed period.
A plain reading of the two sub-sections makes it clear that in cases where the rate of non-agricultural assessment is settled prior to August 1, 1979, then irrespective of the fact that the guaranteed period is yet to expire the power is conferred to revise the same with effect from August 1, 1979. Relying on the provisions of Sub-section (2A), Mr. Sawant submitted that once the revision takes place, then irrespective of the fact when the guaranteed period expires the authorities are entitled to recover the assessment at the revised rate from August 1, 1979. The submission is not correct as it overlooks the difference and the distinction between the provisions of Sub-section (2A) and Sub-section (2B). Sub-section (2A) confers enabling power to revise the assessment with effect from August 1, 1979 even though the guaranteed period has not expired. The expression 'such standard rate shall be deemed to be due for revision at any time on and after that date' merely indicates that the power is conferred to carry out the exercise of revision but there is no compulsion to undertake that exercise. It is, therefore, obvious that in case the authority undertakes such a revision, then till that exercise is complete the rate fixed prior to August 1, 1979 shall continue to remain in operation. The revised rate can come into force only from the date of publication of notification. It must be borne in mind that the provisions of Sub-section (2A) are transitory in nature and it is only provision of Sub-section (2B) which will remain in operation for the future. Sub-section (2B) employs the phraseology that the non-agricultural assessment revised shall be deemed to have come into force with effect from commencement of such next guaranteed period. An illustration would make the position extremely clear. In a case where the assessment is settled in year 1975 the guaranteed period will continue till year 1985. Sub-section (2A) enables the authority to revise the rate after August 1, 1979 in spite of the fact that the guaranteed period is yet to expire. If such revision is undertaken after August 1, 1979, then the revised rates are payable only from the date of publication of the Notification. Sub-section (2B) covers an entirely different situation. Where the standard rate of the assessment is fixed after August 1, 1979, then the guaranteed period will expire on the first occasion after twelve years, and on subsequent occasion after ten years. What Sub-section (2B) provides is that the revised rates after the expiry of the guaranteed period will be payable right from the date of expiry of guaranteed period Irrespective of the fact as to when the revision was completed and Notification issued. It is, therefore, obvious that the learned Single Judge was right in concluding that as the revision was undertaken under Sub-section (2A) in respect of lands which were assessed prior to August 1, 1979 and where the guaranteed period had not expired, the revised rates of assessment are payable only from the date of Notification, that is, July 27, 1981. It is, therefore, not possible to accede to the submission of Mr. Sawant that the learned Judge was in error in the conclusion reached on this aspect. These are the only two contentions raised by the learned Counsel.
6. Accordingly, appeal fails and is dismissed; but the finding of the learned Single Judge that the Collector must serve notices on individual land holders before dividing the urban area into blocks under Section 111 of the Code and permit the land holders to raise objections is set aside.
In the circumstances of the case, there will be no order as to costs.