Madras High Court
Jayachandran & Bros vs Nagapattinam Municipality on 26 July, 2013
Author: S.Palanivelu
Bench: S.Palanivelu
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.07.2013 CORAM THE HONOURABLE MR.JUSTICE S.PALANIVELU S.A. Nos.532 & 533 OF 2005 Jayachandran & Bros. A Regd. Firm Rep.by its Managing Partner S.Rajagopal ... Plaintiff / Appellant in both appeals Vs. Nagapattinam Municipality Rep.by the Commissioner Nagapattinam. ... Defendant / Respondent in both Appeals Second Appeals filed under Section 100 C.P.C. against hte judgment and decree in A.S. Nos.11 & 12 of 2003 on the file of the Principal Sub Court, Nagapattinam confirming the judgment and decree dated 29.04.2003 made in O.S.Nos.225 & 227 of 2001 on the file of the District Munsif, Nagapattinam. For Appellant : Mr.Srinath Sridevan For Respondent : Mr.N.Subbarayalu COMMON JUDGMENT
The plaintiff is the appellant. The defendant is the respondent. These suits have been filed praying for the relief of declaration declaring that the proerty tax levied by the defendant municipality for the suit properties are illegal, arbitrary and against the principles of natural justice and beyond jurisdiction and to pass an order of permanent injunction restraining the municipality from collecting the property tax as per Demand Notice Nos.10475 & 10476 dated 21.02.2000.
2. The case of the appellant/plaintiff is as follows -
2 [a] The suit properties belong to the registered partnership firm of the plaintiff. One S.Rajagopal has been looking after all the affairs of the said firm in his capacity as the Managing Partner. A sum of Rs.6996/- was levied by the defendant municipality as half yearly tax in respect of the Thirumana Mandapam and Rs.8784/- in respect of the lodge which had been functioning in the suit properties and the said amount was remitted. Therefore, even though it was informed to the defendant municipality to reduce the tax levied since the marriage hall was closed on 01.04.1999 and since the lodge located is a place without any sanitary facility, only one or two rooms were let out for rent, no action had been taken, that on 22.03.2001, the Commissioner enhanced the property tax to two fold, i.e. Rs.13,992/- for Thirumana Mandapam and Rs.17,508/- for lodge and a notice was sent stating that the said amount should be remitted, failing which, action would be taken. Even though it was informed to the defendant municipality through letter that the Marriage hall had not been used and te income from the lodge building was less, no reply was given and hence the suits have been filed.
3. In the written statement filed by the defendant, it is averred as follows -
The suits filed by the plaintiffs are not sustainable in law and on facts. A special notice was sent to the plaintiff stating that since the suit buildings were used for rental and commercial purposes, the property tax were enhanced as per the guidelines of the municipality, that alongwith the special notice, working sheet was also sent by the defendant, that the working sheet for tax assessment shall be prepared after conducting site inspection and upon taking into consideration, the similar buildings, which were situated nearby, that before ascertaining the tax, the procedure under Section 78, 81, 82 (2) of the District Municipalities Act and Rule 8 & 6 (A) of Schedule 4 of General Revision were followed, that the annual average rental value has been arrived at, as per the guidelines and that there is no cause ofa ction for these suits and the same are liable to be dismissed.
4. Based on the above pleadings, the trial Court framed relevant issues. During the trial of the case, on the plaintiffs side, one witness was examined and as many as 8 documents were marked as Exs.A.1 to A.8. On the side of the defendant, DW1 was examined and no documents were exhibited.
5. Having considered the oral and documentary evidence adduced, the trial Judge dismissed the suits without costs. Aggrieved by the said judgments, the unsuccessful plaintiff has preferred appeals in A.S.No.11 & 12 of 2003 on the file of the learned Principal Sub Court, Nagapattinam.
6. On considering the materials and documentary evidence placed before it, the Appellate Court dismissed the appeals confirming the judgment and decree of the trial court in O.S.No.225 & 227 of 2001 dated 29.04.2003. Challenging the same, the plaintiff has come forward with the present second appeals.
7. While admitting the Second Appeals, this Court has framed the following substantial questions of law:-
1. Whether the suit will not lie, impugning a municipal tax assessment on the gorund of jurisdiction?
2. Whether the obligation to assess annual rental value on the basis of FAIR-RENT principles will not equally apply in cases of general revisions ?
8. The properties belonging to the plaintiffs are situated in Nagapattinam. One is Marriage Hall in the name and style of Parameshwara Thirumana Mandapam and the another is a lodge in the name and style of Senthil Lodge. The defendant Municipality sent a legal notice on 21.2.2000 to the plaintiff claiming enhanced property tax from the plaintiff. Before issuing notice, the tax for the marriage hall was assessed at Rs.6996/- per half yearly and by means of this notice,the property tax was enhanced to Rs.13,992/-. Senthil Lodge run by the appellant was also assessed to enhanced property tax. Aggrieved by the enhanced tax, the plaintiff has filed a suit for declaration and injunction before the Civil Court.
9. The contention of the defendant is that alongwith the special claim notice, original receipt was also issued to the plaintiff. The Municipal Authorities, before assessing the tax, inspected the building and the surrounding buildings. Since both the buildings are utilised for commercial purposes, it is submitted by the learned cousel for the defendant that the Municipality has doubled the assessment as per the Government Order.
10. Both the cases were jointly tried by the trial court and both the suits were dismissed by the court below by observing that the plaintiff, after getting dismissal before the Municipal Commissioner, should have filed appeal before the Taxation Appellate Authority and if the order of the said Committee was not available, then he should have filed suit before the District Court challenging the order of the Committee.
11. Under Section 89 (3) of the Municipality Act and Rule 26 (b), the learned Appellate Judge also is of the view that the plaintiff should have preferred appeal before the Taxation Appeals Committee and thereafter filed suit before the District Court.
12. The learned counsel Mr.Srinath Sridevan appearing for the plaintiff would submit that in as much as the provisions of the Amendment Act, Section 89 of Amending Acts 65 of 97 has not been so far notified and hence the said Committee is not existing in the Municipality and in the absence of the said Committee, filing of the suits before the said court is maintainable. In support of his contention, he placed reliance upon a decision of this Court reported in 2008 (4) MLJ 167 [Kuzhithura Municipality v. Secretary of Kanyakumari Diocese (CSI) Nagercoil] wherein the learned Judge has dealt with the effect of non-notification of the amending Act.
13. On the side of the defendant, to show that the amendment has been notified, they relied upon Section 23A of the Tamil Nadu District Municipality Act, 1920. Following is the extraction of Section 23A of the Tamil Nadu District Municipality Act, 1920.
23-A. Taxation Appeals Committee Notwithstanding anything contained in this Act -
(1)for every municipality, there shall be a Taxation Appeals Committee which shall consist of the Chairman of the municipal council who shall also be the chairman of the Taxation Appeals Committee and four councilors elected by the council ;
(2)the business of the Taxation Appeals Committee shall be transacted in accordance with the rules made by the State Government in this behalf.
14. R.Sudhakar, J., has observed as follows as to the present position of the consequences of non-notification.
In the light of the circular issued stating that the two amending Acts have not been notified, it is apparent that the provisions of Section 81(2) and 89 of Amending Acts 65 of 97 and 34 of 98 does not have force in the eye of law. Therefore, the question will be whether the order passed by the District Court can be saved even though such proceedings were not supported by the statutory prescription. The immediate answer to the above issue falls from the decision of the Honourable Supreme Court in the case of Kiran Singh and Others v. Chaman Paswan and Others [AIR 1954 SC 340]. In the said decision, an issue arose as to whether a appeal from the decree of subordinate High Court based on the valuation in the plaint, which was subsequent amended. Further question that arose was if as per the original valuation, the District Court having entertained the appeal and passed a decree and judgment, if found to be later not competent to hear the appeal on the ground of lack of jurisdiction, whether the decree and judgment can be saved or is it a nullity.
15. It is contended by the learned counsel for the plaintiff that the Amending Act 65 of 1997 as amended by the Act 34 of 1998 has not been notified so far. The other side has not shown any material to find out in pursuance of which the Taxation Appeals Committee is functioning.
16. Even though it is stated in Section 23A of the Act that the parties aggrieved should prefer an appeal before the Taxation Appeal Committee, the Amending Act including Section 23A was not notified. Hence, in the absence of the said committee, the aggrieved plaintiff had filed the suit before the Civil Court that the suit is maintainable. The learned counsel for the plaintiff also relied upon certain decisions of this Court to support his view that the Civil Suit is maintainable when the assessment was wrongly made.
17. In 66 LW 117 [The Coimbatore Municipality represented by its Commissioner v. G.S.Govindayyar], it is held that if the provisions of the Act have not been complied with by the Municipality the suit will certainly be maintainable. In 1992 (1) L.W. 110 [Chellammal v. Alandur Municipality represented by its Commissioner], it is held as follows -
It is well settled that when the basis of the levy itself is wrong or that there is no basis at all for the levy and in that sense there is no substantial compliance with the provisions of the Municipalities Act, it is open to the Civil Court to declare the levy as illegal and in fact itis its duty to do so.
18. In view of the above said authorities, if the Municipality has not followed the provisions of the Municipalities Act or if the levy of tax is higher, it is open to the Civil Courts to declare. Hence, the suit is very well maintainable before the Civil Court.
19. The learned counsel for the defendant would submit that in as much as both the courts have elaborately dealth with the merits of hte case and have upheld the assessment of enhanced property tax. Once a Civil Court comes to the conclusion that hte usits were not maintainable then there would be no option for the court to proceed with the matter and pass judgment on merits. But in this case, even though both the trial court and the First Appellate Court categorically recorded finding that suits were not maintainable, they embark upon deciding the matter on merits and pass judgment. Further, as rightly pointed out by the learned counsel for the plaintiff, both the courts have erred in recording the finding that the suit is not maintainable. Since this Court has accepted that both the suits are maintainable, then both the cases have to take up afresh for which purpose the cases are remanded back to the trial court to proceed on merits. In such view of this matter, the judgment and decree of both the courts below have to be set aside and they are accordingly set aside. The substantial questions of law are answered as indicated above.
20. In fine, both the Second Appeals are allowed. The judgment and decree of the trial court and First Appellate Court are set aside. No costs. The cases are remanded back to the trial court to decide the case on merits and before the trial court, both the parties may be given ample opportunities to lead oral and documentary evidence. Both the parties are directed to appear before the court below on 18.03.2014. The trial court is directed to dispose of this case within a period of three (3) months from the date of receipt of the case records from this court.
26.07.2013 Internet : Yes/No Index : Yes/No rgr To 1.The Principal Subordinate Judge, Nagapattinam. 2.The District Munsif, Nagapattinam. S.PALANIVELU, J. rgr S.A. Nos.532 & 533 OF 2005 26.07.2013