Bombay High Court
The Municipal Corporation Of Greater ... vs L.K. Builders on 9 August, 1994
Equivalent citations: 1995(4)BOMCR606
JUDGMENT D.R. Dhanuka, J.
1. The Municipal Corporation of Greater Bombay has preferred these appeals against order dated 31st January, 1979 passed by the learned Additional Chief Judge of the Court of Small Causes in Municipal Appeals Nos. M/78 to M/88 of 1977. The learned Additional Chief Judge took the view that the sub-plots referred to in the judgment under appeal should be rated notionally for the purposes of fixation of rateable value. These appeals pertain to fixation of rateable value by the Municipal Corporation of Greater Bombay in respect of plots reserved for college, cemetery, play-ground, recreation ground, municipal hall, garden, school, etc. The Assessor and Collector had fixed the rateable value of all these reserved plots by adopting the value thereof at Rs. 12/- per square meter and computing 9% return of such value as the basis for fixing of rateable value. The learned Additional Chief Judge fixed the rateable value of all these plots which were subject matter of above referred appeals notionally at Rs. 450/- each for the year 1977-78 i.e. very much lower than even the old rateable value accepted by the assesse during the course of years.
2. By several deeds of conveyances dated 14th May, 1973 between the partners of Messrs. L.K. Builders and the former owners of various plots of land situate at Borivli and Eksar within limits of Greater Bombay, Messrs L.K. Builders (the respondents in these appeals) had purchased and/or acquired lands admeasuring about 2,16,590 sq.yards for purpose of development of the same. It appears to be the case of the respondents themselves in the appeal filed before the Town Planning Tribunal that a very large number of sub-plots were reserved/designated for various purposes in the sanctioned development plan of R Ward approved by the Government of Maharashtra on 20th September, 1965. It appears that the prescribed authorities had approved lay out of old final plots Nos. 324, 624 and 625 and the said final plots are now renumbered as plot Nos. 275, 620 and 719. Considerable development work was carried out by the respondents in this appeal on various final plots situate at Borivli and Eksar and the scheme of development undertaken by the respondents is known as "Kastur Park Scheme".
3. All these plots known as sub-plot No. 31 (garden plot), sub-plot No. 32 (recreation ground), sub-plot No. 33 (cemetery), sub-plot No. 34 (recreation ground), sub-plot No. 35 (recreation ground), sub-plot No. 61 (garden plot), sub-plot No. 62 (play ground), sub-plot No. 63 (school plot), sub-plot No. 25 (garden plot), sub-plot No. 26 (recreation ground) and also the sub-plot reserved for college etc. were assessed to rateable value by the Municipal Corporation for much lesser amount for the period prior to 1st October, 1975. I shall give an illustration emerging from the record in this case. Sub-plot No. 31 (garden plot) was assessed to rateable value of Rs. 1595/- only for the period upto 30th September, 1975. It appears that for the period commencing from 1st October, 1975 to 31st March, 1976, the rateable value of the same plot was sought to be increased by the prescribed authority to Rs. 4780/-. The enhanced rateable value was confirmed. No appeal was filed against the said enhanced rateable value as permissible under section 217 of Bombay Municipal Corporation Act.
4. The respondents received similar notices for enhancement of rateable value in respect of all these reserved plots for the period commencing from 1st April, 1976 to 30th September, 1976 and 1st October, 1976 to 31st March, 1977. This time the respondents filed their regular complaint against the said proposed enhancement of rateable value by their letter dated 21st October, 1976, inter alia contending that the said reserved plots could not be subjected to rateable value as the said plots could not be built upon and could not be used or let out in as much as the same were reserved for public purposes. The Assessor and Collector granted personal hearing to the respondents and fixed the rateable value of each of these reserved sub-plots by adopting the capital value of the reserved plot at the rate of Rs. 12/- per sq. meter and working out return of 9% thereon. It was argued on behalf of the respondents before the Assistant Assessor and Collector that the plot of land which was reserved for garden or for other similar purpose had no rateable value at all and the same should not be assessed for purpose of rateable value at all. The Assessor and Collector had adopted the rate of Rs. 20/- per sq. meter for the buildable regular plots for purpose of fixation of rateable value and computed 9% return though as the basis after ascertaining the capital value of the plot on the above footing.
5. Being aggrieved by order dated 4th February, 1977 passed by the Assessor and Collector of Bombay Municipal Corporation confirming the rateable value in respect of each of the reserved plots, the respondents herein filed their respective appeals being Municipal Appeal No. M/78 of 1977 to Municipal Appeal No. M/88 of 1977 before the learned Chief Judge of the Court of Small Causes at Bombay as contemplated under section 217 of Bombay Municipal Corporation Act.
6. During the course of proceedings before the trial Court the respondent relied inter alia on condition No. 13, 14 and 17 imposed by the Municipal Corporation of Greater Bombay while sanctioning plans copies whereof are to be found at page 25 to 27 of the appeal paper book. Condition Nos. 13, 14 and 17 attached to the sanction of the lay out of the various plots of land referred to therein read as under :
"13. That the plots together admeasuring 15% of the total area of 16,080.00 sq. mtrs. whichever is greater and shown green in colour on the plan shall be kept open and unbuilt upon and shall be developed as recreation ground the periphery and shall be properly maintained by all subdivided plot holders.
14. That the plots, school, play ground, college, cemetary and recreation grounds as T.P.S. III reserved in the Development plan for D.P. Roads admeasuring 61,554.00 sq.mtrs. and shown in respective colours shall be left unbuilt upon, open and shall be handed over to the Municipality whenever required.
17. That no subdivided plot of the layout shall be sold unless the proposed recreation amenity ground is properly levelled and unless the internal roads are duly metalled, drained and lighted".
The respondents also relied upon Architect's report being report dated 23rd September, 1978 in support of their contention that no rateable value could be fixed in respect of the reserved plots as the reserved plots could not be built upon under the Development Control Rules and the said reserved plots had thus no value at all. It was stated in the said report that the said plots were reserved by the prescribed authorities under the Town Planning Scheme III (Borivli) and under the Development Control Rules.
7. At the hearing of these appeals, common evidence was led. On behalf of respondents one Ajay Nandlal Joshi was examined as the first witness. The said witness stated that the respondents had acquired the plot of land at Borivli bearing Plot Nos. 25 and 26 of Eksar and Survey Nos. 120 to 124 (149) (Part) of village Borivli. The said witness stated that several sub-plots were required to be kept vacant as the same were reserved for school, play ground, college, cemetery, recreation ground, etc. It is common ground that the said plots were not "acquired" and the compensation payable in lieu of acquisition was not yet paid to the respondents. One Harikant Laxmidas Ganjawalla, the Architect of the respondents, was also examined as witness at the hearing of the said appeals. The said witness stated that the total area of all these plots was 1,79,359 sq. mts. and the total area of saleable plot was only 1,05,242 sq. mts. The said witness stated that about 16,018 sq. mts. were provided as recreation ground as per development rules and 61,554 sq.mts. were reserved for the development plans for schools, playgrounds, cemetery etc. It was stated that about 42% of the total area of the plot was thus reserved for various amenities and recreation grounds. One Sahadeo Daulat Dalvi was examined as a witness on behalf of the Municipal Corporation at the hearing of the said appeals.
8. The learned trial Judge reached the conclusion that these reserved plots had no rateable value at all and at the most the same could be notionally or nominally valued. The learned trial Judge referred to the provisions contained in sections 43 and 44 of the Maharashtra Regional Town Planning Act and also the conditions attached to the sanction of lay out plan referred to hereinabove. The learned trial Judge therefore fixed the rateable value in respect of each of the plots at Rs. 450/- only for the year 1977-78 which amount was lower than even the old rateable value of the said plots. The old rateable value of the ground plots was 1240/- or 1595/- or 1290/- or 2095/-. In my opinion, the learned Additional Chief Judge committed a serious error of law while holding that the reserved plots had no rateable value at all or that the rateable value of these plots should be notionally or nominally fixed as done by him.
9. Both the learned Counsel appearing at the hearing of these appeals have invited attention of the Court to the various provisions of the Maharashtra Regional Town Planning Act, 1966. I shall now refer to the relevant sections of the said Act. Section 43 of the said Act provides that after the date on which a declaration is made by the prescribed authority of intention to prepare a development plan or of designating development plan, no person shall institute or change the use of any land or carry out any development of land without the permission in writing of the Planning Authority except in nine categories of cases covered under the proviso to the said section where no such permission shall be necessary. Section 43 of the said Act thus permits restricted user of the reserved plots without any permission from the Planning Authority. Section 43 of the said Act permits even change of user of the reserved plots with permission of the planning authority. It appears that the reserved plots can be used temporarily for such purposes which can be considered as normal use of the plots. It is true that no one can develop the reserved plots without the prior sanction of the planning authority in view of the provisions contained in section 44 of the Act. The expression "development" is defined by section 2(7) of the said Act as carrying out or building engineering mining or other operations etc. Even development work on the reserved plots can be permitted by the planning authority if it chooses to grant permission to the applicant for development of such plots unconditionally or subject to conditions as permissible under section 45 of the said Act. There is no restriction on sale of these plots. Whenever plots are reserved for recreation grounds under the Development Control Rules such reservation enhores and provides an aminity for the buildable plots. Merely because all these plots are reserved for certain purposes as mentioned in earlier part of this judgment under the development plan or under the town planning scheme, it does not follow that the same have no value for the owner of the plots. Whenever a town ship is to come or whenever a huge building complex is to be constructed, the entire land can never be built upon. Some of the remaining sub-plots of the land are always required to be kept open under the Development Control Rules or some such plots can be used for limited purposes. It does not follow that these plots have no rateable value or no value at all.
10. There is one more aspect which is not totally irrelevant even for fixation of rateable value. Section 125 of the Maharashtra Town Planning Act provides that any land reserved or designated in a development plan or a town planning scheme for a public purpose may be acquired under the Land Acquisition Act, 1984. If the plot reserved for any of the public purposes specified in the Development Plan or Town Planning Scheme is acquired, the owner is entitled to payment of compensation equivalent to market value of the plot so acquired.
11. In my opinion, the observations made by the Supreme Court in the case of Municipal Corporation of Greater Bombay v. M/s. Polychem Limited, , are also of some relevance for purpose of deciding the question as to whether these reserved plots can be considered to have no rateable value at all. In the above referred case , the Court was concerned with the question as to whether the plot under construction could be treated as rateable land or whether the doctrine of sterility apply. Baig J., speaking for the Court held that the land under construction was liable to be treated as vacant land for purpose of fixation of rateable value and the doctrine of sterility had no application. It is true that as pointed out by Mr. Samant that this was a case of a buildable plot and the appeals herein relate to reserve plots. To my mind the differentiation made by Mr. Samant is relevant only to a limited extent. In case of buildable plots, the rateable value shall have to be fixed at higher amounts as compared to the non-buildable plot. I do not share the view taken by the Additional Chief Judge that the plots which are not buildable without permission or the plots which have restricted user should be assessed to rateable value at nominal amount or at "nil" amount.
12. In this view of the matter, I have no hesitation in setting aside the orders passed by the learned Additional Chief Judge in the group of appeals being Municipal Appeal No. M/77 to M/88 of 1977. There was no material before the learned Additional Chief Judge to reach the conclusion that the rateable value of each of the plots could be taken at Rs. 500/- per year. The finding arrived at by the learned Additional Chief Judge is erroneous in law and is conjectural as far as figure of fixation of rateable value at Rs. 450/- is concerned.
13. It shall be however hazardous to confirm the order of the Assistant Assessor and Collector passed on 4th February, 1977, straightway. In my opinion, it is necessary and in the interest of justice to remand these appeals for further hearing in light of the observations made by this Court in this judgment and remand the matters to the learned Additional Chief Judge with direction to redecide the appeals in light of the judgment after giving an opportunity to both sides to lead further evidence.
14. In the result, the appeals herein filed by the Municipal Corporation of Greater Bombay are allowed. Order passed by the learned Additional Chief Judge in each of the Municipal Appeals on 31st January, 1979 are set aside. The Municipal Appeal Nos. M/78 to M/88 of 1977 are remanded to the learned Additional Chief Judge of Small Causes Court at Bombay for re-hearing as indicated above.
15. Since these appeals are very old appeals, the learned Additional Chief Judge is directed to give priority to the hearing of these appeals on remand and endeavour to decide all these appeals latest by 30th June, 1995.
16. No order as to costs.
17. The Registrar, Appellate Side, High Court, Bombay, is directed to return the record to the trial Court expeditiously.
18. Issue of certified copy expedited.