Bombay High Court
Brihanmumbai Mahanagarpalika vs Arvind Nemchand Vakilwala on 8 October, 2013
Author: S.S. Shinde
Bench: S.S. Shinde
FA1448 judgment_2012
Vidya amin
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO. 1448 OF 2012
WITH
CIVIL APPLICATION NO. 2456 OF 2008 IN F.A. NO. 1448 OF 2012
1. Brihanmumbai Mahanagarpalika
2. Municipal Commissioner of Gr. Mumbai
Municipal Corporation Building,
Mahapalika Marg, Mumbai - 400 001. ... Appellants
vs.
1. Arvind Nemchand Vakilwala
age 70 years, Business.
2. Smt. Smruti R. Shah,
aged 50 years, Occ. Household.
3. Smt. Sushila Ratanchand Vakilwala,
aged 76 years, Occ. Household.
4. Shri Vatchal Dipchand Vakilwala,
aged 47 years, Occ. Business,
All residing at 82/88, Vithalbai,
Patel Road, Ratan House, 3rd floor,
Opp. Bank of India, C.P. Tank,
Mumbai - 400 004. ... Respondents
Mrs. Geeta Joglekar for the appellant/BMC.
Mr. R.A. Thorat, senior counsel i/b. Mr. Pramesh Vakil for respondent
nos. 1, 3 to 5.
CORAM : S.S. SHINDE, J.
RESERVED ON : 30th September, 2013.
PRONOUNCED ON : 8th October, 2013.
JUDGMENT
This appeal is filed by the appellants thereby challenging the judgment and order passed by the Court of Small Causes at Mumbai in Municipal Appeal No. 311 of 2002 on 26th October, 2007.
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2. The original appellants/respondents herein are the owners of the property described in paragraph 1 of the Memo of Appeal filed before the Court of Small Causes. It is the case of the respondents herein that they have paid the property taxes as per the bills received from the Municipal Corporation, Greater Bombay from time to time and they have paid last tax bill for the period ending 31 st March, 2002. It is further case of the respondents that they received a letter dated 4 th March, 2002 addressed to Ratanchand Nemchand Vakilwala and others from the original respondents/appellants at their residential address. It was mentioned in the said letter that special notices under sections 162(2) and 167 of M.M.C. Act have been pasted on the property of the respondents on 4th March, 2002 and rateable value of the property involved in the appeal is fixed at the rate of Rs.17,940/- n.p.a. w.e.f. 1 st April, 2001. It was stated in the said letter that if the original appellants wish to complain against the increase in rateable value they can do so in writing within 15 days from the date of pasting under Section 163 of the said Act. It is further case of the respondents that they received the said letter in the second week of March, 2002 and by their advocate's letter dated 15 th March, 2002 they informed the Assessing Authority of the Municipal Corportion that Ratanchand Nemchand Vakilwala expired in or about 1987 and the Corporation cannot increase the rateable value without any material and reasons.
The Corporation was also called upon to give personal hearing to the 2 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 respondents.
3. It is further case of the respondents that they received two amended bills of property taxes for the period from 1 st April, 2001 to 30th September, 2001 and 1st October, 2001 to 31st March, 2002 both dated 11th March, 2002 showing the increase in the rateable value of the property involved in the appeal and the respondents were called upon to pay the difference of the tax amount for the said period. The respondents herein vide letter dated 21 st march, 2002 informed the respondents that they received the said two bills on 18 th March, 2002 after the rateable value of the property involved in the appeal has been increased by them. They also informed the Corporation by their letter that the Assessing Authority of the Municipal Corporation pasted the requisite notice on the property involved in the appeal though they were aware about the residential address of the respondents. It is their contention that they have not received the notice under sections 162(2) and 167 of M.M.C. Act and therefore the rateable value at the rate of Rs.17,940/- n.p.a. w.e.f. 1st April, 2001 and the bills issued on the basis of the said rateable value is illegal and invalid.
4. The respondents/original appellants, being dissatisfied and aggrieved by the acts of the Municipal Corporation increasing the rateable value without following the proper procedure, filed the appeal 3 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 before the Court of Small Causes on various grounds. The main grievance of the respondents was to the effect that they have not received notices under section 162(2) and 167 of MMC Act and the Corporation have not followed the procedure laid down for increasing the rateable value. The Municipal Corporation has not given personal hearing to the respondents before the rateable value of the property involved in the appeal is increased.
5. The appellants/original respondents appeared and filed the written statement contesting the appeal before the Court of Small Causes, Mumbai. They admitted that the original appellants, who are the owners of the property involved in the appeal and they had sent a letter dated 4th March, 2002 to Ratanchand Nemchand Vakilwala which was received by the original appellants. They also admitted that the Municipal Corporation has increased the rateable value of the property involved in the appeal at the rate of Rs.17,940/- n.p.a. w.e.f. 1 st April, 2001 and have issued two bills dated 11 th March, 2002 on the basis of increased rateable value and called upon the original appellants to pay the difference of tax amount for the period mentioned in the said bills.
The Municipal Corporation has admitted the receipt of the letters dated 15th March, 2002 and 21st March, 2002 from the original appellants.
However, the Municipal Corporation has denied that they have increased the rateable value of the property involved in the appeal 4 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 without following the procedure laid down in M.M.C. Act. They further denied that the respondents were not served with the notices under sections 162(2) and 167 of M.M.C. Act before the rateable value was increased. They further denied that the original appellants did not get an opportunity of hearing before the rateable value was increased.
6. It is further case of the Municipal Corporation that they have increased the rateable value in accordance with law as per the order dated 26th June, 2002 passed by the Inquiry Officer. Therefore, they prayed that the appeal filed by the original appellants may be dismissed.
7. By the impugned judgment and order, the Court of Small Causes at Mumbai allowed the appeal filed by the respondents herein/original appellants. Hence, this appeal by Municipal Corporation, Greater Mumbai.
8. The learned counsel appearing for the appellants invited my attention to various documents placed on record including the letter written to Ratanchand Nemchand Vakilwala and submits that the LRs of Ratanchand Nemchand Vakilwala did participate in the proceedings before the Inquiry Officer and after giving personal hearing to them, the assessment order is passed. It is submitted that no prejudice has been 5 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 caused to the original appellants and therefore the appeal filed by original appellants should have been dismissed by the Court below. The learned counsel further invited my attention to various grounds taken in the appeal memo. She submits that once the complaint is disposed of under section 166 of the M.M.C. Act, in that case, there is no question of allowing the appeal on the ground of non-observance of provisions of Section 162(2) and 167 of M.M.C. Act. It is submitted that the notice was pasted and therefore there was compliance of service of notice.
The fact that letter was received by the LRs of Ratanchand Nemchand Vakilwala that itself is sufficient to hold that the notice was served upon them. The learned counsel further submits that rateable value fixed by the Municipal Corporation is in accordance with the relevant provisions.
There is no illegality or irregularity and therefore, there was no reason for the Court of Small Causes to interfere in the assessment order of the Inquiry Officer appointed by the appellants herein. The learned counsel for the appellants has invited my attention to the copies of documents placed on record from the original record and submits that this appeal deserves to be allowed.
9. On the other hand, the learned counsel for the respondents/original appellants invited my attention to the provisions of Sections 162(2) and 167 of M.M.C. Act and submits that the said provisions contemplates service of special notice on the assessee. It is 6 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 submitted that in absence of service of notice, the original appellants were not known about the points which they have to reply. It is submitted that when the Corporation wanted to increase the rateable value, it was incumbent upon the appellants-Corporation to follow the provisions of Section 162(2) and 167 of M.M.C. Act. The learned counsel further invited my attention to the provisions of Sections 484 and 485 of MMC Act and submits that the detailed procedure is provided under said sections in respect of how to effect the service on the assessee. It is submitted that the appellant-Corporation has not placed anything on record so as to show that the procedure for service of notice as laid down under sections 484 and 485 has been followed by them. It is submitted that the Court below upon appreciation of evidence placed on record has given probable reasons and certainly the findings recorded by the Court below is not perverse in any manner. It is submitted that in absence of following principles of natural justice and in absence of service of notice on the original appellants, the Corporation should not have proceeded further to fix the rateable value.
The learned counsel, in support of his contention that proper service of notice is necessary, placed reliance on the reported judgment of this Court in case of Dalamal Tower Premises Cooperative Society Ltd. & Anr. vs. Municipal Corporation of Brihan Mumbai & Ors. reported in 2005(1) Mh. L.J. 547 and in particular headnote thereof. Therefore, relying upon the grounds taken in the appeal memo before the Court of 7 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 Small Causes, the counsel appearing for the respondents submits that the appeal is devoid of any merits and the same may be dismissed.
10. I have given careful consideration to the submissions of the learned counsel appearing for the parties. With their able assistance, perused the grounds taken in the appeal memo annexure thereto, other documents placed on record by the appellants and also the provisions of M.M.C. Act and the judgment in case of Dalamal Tower Premises Cooperative Society Ltd. (supra). It appears that the main ground which was agitated before the Court of Small Causes by the respondents herein was non-compliance of provisions of sub-section (2) of Section 162 and Section 167 and further the compliance of Sections 484 and 485 of the M.M.C. Act. Upon careful perusal of the reasons assigned by the Court below, it appears that the Court accepted the contention of the original appellants that there was no service of notice upon the respondents and in absence of such notice, there was no adherence to the principles of natural justice and therefore, the assessment in absence of service of notice was not in accordance with the provisions of M.M.C. Act.
11. Since the case in hand entirely revolves around the provisions of Sections 162(2), 167, 484 and 485, it would apposite to reproduce herein below the provisions of sub-section (2) of Section 162 of M.M.C. 8 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 Act, which reads thus:
162 (2) In every case in which any premises have for the first time been entered in the assessment-book as liable to the payment of property rates or in which the rateable value of any premises liable to such payment has been increased, the Commissioner shall, as soon as conveniently may be after the issue of the public notice under subsection (1) give a special written notice to the owner or occupier of the said premises specifying the nature of such entry and informing him that any complaint against the same will be received in his office at any time within twenty-one days from the service of the special notice.
12. Upon careful perusal of sub-section (2) of Section 162 of M.M.C. Act, it is abundantly clear that in every case in which rateable value or capital value, as the case may be, of any premises liable to such payment has been increased, the Commissioner shall, as soon as conveniently may be after the issue of the public notice under sub-
section (1) give a special written notice to the owner or occupier of the said premises specifying the nature of such entry and informing him that any complaint against the same will be received in his office at any time within twenty one days from the service of the special notice.
Therefore, in the light of provisions of sub-section(2) of Section 162 of M.M.C. Act, it is incumbent upon the Commissioner to give special written notice to the owner of occupier. Therefore, the contention of the counsel appearing for the appellants-Corporation that since the letter was written in the name of Ratanchand Nemchand Vakilwala and the same was received and in pursuant to receipt of said letter, the LRs of Ratanchand Nemchand Vakilwala appeared before the Inquiry 9 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 Officer and therefore no prejudice has been caused to their interest, cannot be accepted. The special written notice as contemplated under the aforesaid provisions is necessary to be given to the occupier or owner, as the case may be, so that the said owner or occupier should know which aspects/points he has to answer in the said notice. The contents of the notice assumes importance as much as the assessee i.e. the owner or occupier gets an opportunity to defend his case in the light of contents of the notice. Therefore, the contention of the counsel appearing for the appellant-Corporation that notice was pasted and even in the absence of service of such notice, the letter in the name of Ratanchand Nemchand Vakilwala was received by his LRs and they participated in the proceedings and no prejudice has been caused to their interest, cannot be accepted.
13. The appellant-Corporation has also invoked the provisions of Section 167 in the present case. The provisions of Section 167 of M.M.C. Act provides that assessment book may be amended by the commissioner during the official year. The amendment in the assessment book shall be deemed to have been made, for the purpose of determining the liability or exemption of the person concerned in accordance with the altered entry, from the earliest day in the current official year when the circumstances justifying the amendment existed.
Therefore if the provisions of Section167 are read carefully, the 10 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 Commissioner may appoint the representative of any person concerned, or upon any other information, at any time during the official year to which an assessment-book relates amend the same by inserting therein the name of any person whose name ought to be so inserted or any premises previously omitted or by striking out the name of any person not liable for the payment of any property tax, or by increasing or reducing the amount of any rateable value or capital value, as the case may be, and of the assessment based thereupon, or by making or canceling an entry exempting any premises from liability to any property-tax. Therefore, the provisions of Section 167 would have effect of changing the entry in the assessment register. Therefore, the occupier or owner, as the case may be, is required to serve the notice.
However, in the facts of the present case, nothing has been brought to the notice of this Court that there was service of notice on the respondents.
14. The provisions of Sections 484 and 485 provides procedure to effect the service on owners of the premises and other premises. The provisions of Sections 484 and 485 reads thus:
"484. Service how to be effected on owners of premises and other persons.
When any notice, bill, schedule, summons or other such document is required by this Act, or by any regulation or by-law made under this Act, to be served upon or issued 11 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 or presented to any person, such service, issue or presentation shall except in the cases otherwise expressly provided for in section 485, be effected--
(a) by giving or tendering to such person the said notice, bill, schedule, summons or other document; or
(b) if such person is not found, by leaving the said notice, bill, schedule, summons or ether document at his last known place of abode in the [Brihan Mumbai] or by giving or tendering the same to some [adult member] or servant of his family; or
(c) if such person does not reside in [Brihan Mumbai] and his address elsewhere is known to [the Commissioner or the General Manager], by forwarding the said notice, bill, schedule, summons or other document to him by post under cover bearing the said address; or
(d) if none of the means aforesaid be available by causing the said notice, bill, schedule, summons or other document to be affixed on some conspicuous part of the building or land, if any, to which the same relates.
485. Service on "owner or occupier" of premises how to be effected.
When any notice, bill, schedule, summons or other such document is required, by this Act, or by any regulation or by-law made under this Act, to be served upon or issued or presented to the owner of occupier of any building or land, shall not, be necessary to name the owner or occupier therein, and the service, issue or presentation thereof shall be effected, not in accordance with the provisions of the last preceding section as follows, namely: --
(a) by giving or tendering the said notice, bill, schedule, summons or other document to the owner or occupier, or if there be more than one owner or occupier, to any one of the owners or occupiers of such building or land; or
(b) if the owner or occupier or no one of the owners or 12 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 occupiers is found, by giving or tendering the said notice, bill, schedule, summons or other document to some adult member or servant of the family of the owner or occupier or of any one of the owners or occupiers; or
(c) if none of the means aforesaid be available by causing the said notice, bill, schedule, summons or other document to be affixed in some conspicuous part of the building or land to which the same relates.
485A. Power of Commissioner to call for information as to ownership of premises.
(1) To enable him to serve any notice (including any copy of any notice) which he is authorised or required to serve, the Commissioner may require the owner or occupier of any premises, or of any portion thereof to state in writing, within such reasonable period as the Commissioner may prescribe in this behalf, the nature of his interest therein and the name and address of any other person known to him as having an interest therein, whether as freeholder, mortgagee, lessee or otherwise.
(2) Any person required by the Commissioner in pursuance of sub-section (1) to give the Commissioner any information shall be bound to comply with the same, and to give true information to the best of his knowledge and belief.]
15. Upon careful perusal of the provisions of Sections 484 and 485, it is abundantly clear that the proper mode of service is provided. In the first place, notice is to be served upon or issued or presented to the owner or occupier of any building or land, if there are more than one owner or occupier, to any one of the owners or occupiers of such building or land; if the owner or occupier or no one of the owners or occupiers is found, by giving or tendering the said notice to some adult member or servant of the family of the owner or occupier or of any one 13 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 of the owners or occupiers or if none of them is available by causing the said notice, then to be affixed in some conspicuous part of the building or land to which the same relates. The appellant-Corporation has not led any evidence before the Court below so as to demonstrate that the appellants have tried to serve notice upon the respondents as contemplated under the aforesaid provisions.
16. The Court of Small Causes has considered the provisions of Section 162(2) and 167 of M.M.C. Act in paragraphs 13 to 15 of the impugned judgment. So far as letter written by the Municipal Corporation to Ratanchand Nemchand Vakilwala, in paragraph 13 of the impugned judgment the Court below held that the said letter was sent to the residential address of the original appellants. When the Corporation could send the letter dated 4 th March, 2002 to Ratanchand Nemchand Vakilwala at the residential address, they could have served the original appellants with special notices under sections 162(2) and 167 of M.M.C. Act at their residential address personally. But Corporation has not served the said special notices on the original appellants at their residential address. It is further observed that, no explanation is offered by the Corporation as to why they did not serve the special notices upon the original appellants at their residential address personally. There is no evidence except the mere statement in the letter dated 4th March, 2002 Exh. 'A' that the special notices were 14 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 pasted on the property of the original appellants on 4 th March, 2002.
The Court below further observed that the Corporation cannot increase the rateable value of the property without giving special notice to the assessee under sections 162(2) and 167 of M.M.C. Act and giving opportunity of personal hearing.
17. In the instant case, as the Corporation did not comply with the provisions of Section 162(2) and 167 of M.M.C. Act, the original appellants could not get an opportunity of personal hearing before the rateable value of the property in appeal was increased at the rate of Rs.17,940/- n.p.a. w.e.f. 1st April, 2001.
18. Upon independent scrutiny of the documents placed on record and after hearing the counsel appearing for the appellants, this Court is of the opinion that the findings recorded by the Court of Small Causes at Mumbai are not perverse in any manner. This Court in case of Dalamal Tower Premises Cooperative Society Ltd. (supra) while considering the provisions of Section 167 of B.M.C. Act, 1888 held that if the reassessment order is without notice or if said order does not disclose the basis on which reassessment was made, the said reassessment order revising the assessment cannot be sustained.
19. The Supreme Court in the case of East India Commercial Co. Ltd., 15 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 Calcutta & Anr. vs. Collector of Customs, Calcutta reported in AIR 1962 SC 1893, while interpreting the provisions of Section 167 of the Sea Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 held that where a Collector of Customs proposes to take action under the aforesaid provisions, the proceedings under the said sections being quasi-judicial in nature, whether a statute provides for a notice or not, it is incumbent upon the Collector to issue notice to the importer disclosing the circumstances under which proceedings are sought to be initiated against him.
20. In another judgment of the Supreme Court in case of Food Corporation of India vs. State of Punjab and Ors., reported in AIR 2001 SC 250, while interpreting the provisions of Sections 66, 67 and 68A of the Punjab Municipal Act held that the notice to the affected person mandated in the section is not an empty formality; it is meant for a purpose. A vague and unspecific notice will not provide reasonable opportunity to the noticee to file objection meeting the reasons/grounds on which the amendment of the assessment list is proposed to be made. Such a notice cannot be taken to complying with the statutory requirement.
21. Therefore, in the light of discussions herein above, this Court is of the opinion that, the Court of Small Causes at Mumbai has recorded the 16 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 ::: FA1448 judgment_2012 findings in consonance with the evidence brought on record. The view taken by the Court below is reasonable and needs no interference.
Therefore, the First Appeal is devoid of any merits, hence the same is dismissed.
22. In view of dismissal of First Appeal, Civil Application does not survive and the same is accordingly disposed of.
23. Though this appeal is dismissed, the Corporation is not precluded from issuing fresh notice to the respondents and after following the procedure under M.M.C. Act could proceed further in respect of subject matter of earlier notice.
24. At this juncture, the counsel for the appellant makes an oral prayer to stay the effect, implementation and execution of the present order. At her request, the effect and implementation of the present order is stayed for a period of four weeks from today.
(S.S. SHINDE, J.) 17 Of 17 ::: Downloaded on - 27/11/2013 20:24:15 :::