Madras High Court
Coimbatore Municipality Represented ... vs G.S. Govindayyar on 11 July, 1950
Equivalent citations: AIR 1953 MADRAS 689
JUDGMENT Raghava Rao, J.
1. The Interesting question argued In this second appeal is the maintainability of a suit by the owner of a house in a Municipality questioning the assessment in respect thereof by the municipality and seeking a refund of the amount collected by the Municipality on the basis of such assessment. The plaintiff is the owner of a house property bearing door No. 5/7 in the Imperial Bank Road, Coimbatore. The defendant is the municipality of Coimbatore represented by its Commissioner. The case of the plaintiff is that the property is liable to a house-lax only of Rs. 124-14-0 per half year on the basis of an annual rental value of Rs. 1665. That wag the value fixed by the Deputy Inspector of Municipal Councils on the basis of the monthly rental of Rs. 150 fixed as the fair rent for the house by the District Collector of Coimbatore under the House Rent Control Order. The plaintiff attacks the value of Rs. 4440 adopted by the Municipality for determining the house-tax as being capricious and unreasonable in view of the orders of the Deputy Inspector of Municipal Councils and of the District Collector of Coimbatore aforesaid. The defendant pleaded that it was not bound by such orders and that the levy was justified under Section 82 of the Madras District Municipalities Act, which will hereinafter be referred to as the Act. It also raised the contention that since the provisions of the Act had been complied with the jurisdiction, of the court stood excluded, and that the plaintiff had accordingly to be non-suited. The learned Subordinate Judge of Coimbatore by whom the suit was tried upheld the pleas of the Municipality and dismissed the action. The learned District Judge on appeal has reversed him and decreed the suit.
2. It is argued for the Municipality in this second appeal that however erroneous the levy of tax under Section 82 of the Act may be, Section 354 interposes a bar in the way of a suit to question it. It is also contended that the only remedy of the plaintiff was to appeal against the assessment under the Act.
3. Section 82 of the Act so far as material provides in Sub-section (2) that the annual value of buildings shall be deemed to be the gross annual rent at which they may reasonably be expected to let from month to month or from year to year, Section 354 so far as material provides as follows :
"(1) No assessment ..... under the authority of this Act shall be impeached or affected by reason of any clerical error or by reason of any mistake ........ in respect of the amount assessed ... ... ... provided that the provisions of this Act have been in substance and effect complied with;
(2) No suit shall be brought in any court to recover any sum of money collected under the authority of this Act or to recover damages on account of any assessment, or collection of money made under the said authority.
Provided that the provisions of this Act have been, in effect, complied with."
The learned District Judge in appeal held that in view of the order of the District Collector under the House Rent Control Order the amount of assessment charged by the defendant was not on the basis of the annual rent at which the premises could reasonably be expected to let from month to month or from year to year within the meaning of Section 82 (2) of the Act, and that in view of the order of the Deputy Inspector of Municipal Councils based upon the fair rent fixed by the Collector the annual value of the lands for the purpose of that section and that subsection could be what the Municipality adopted in disregard of that order. It followed in the opinion of the learned District Judge that the civil court "has jurisdiction to entertain the suit as the action of the defendant was arbitrary and capricious." Section 354 of the Act did not, according to the learned District Judge, create a difficulty in the way of the plaintiff apparently because the provisions of the Act relating to assessment were not, in substance and effect, complied with and the proviso to the section did not accordingly stand satisfied.
4. Whether in terms of Section 82(2) of the Act the annual rent adopted by the Municipality is such as the premises may reasonably be expected to let at from month to month or from year to year is a question of fact. Unless vitiated by any error of principle that finding of the learned District Judge in regard to this matter cannot be challenged in second appeal It was not as if there was no evidence to support his conclusion. On the other hand, the material in support of it is ample. Prima facie, the orders of the Collector & the Deputy Inspector of Municipal Councils should have been accepted by the Municipality, and the District Judge rightly held that the action of the Municipality in disregard of those orders was something capricious and arbitrary. The provisions of the Act cannot in terms of the proviso to Section 354 be accordingly held to have been complied with by the Municipality in substance or in effect.
5. There being no bar of suit under the terms of Section 354 of the Act, the question is whether 'de hors' the section there is any such bar. I am not satisfied that there is any. The mere fact of the existence ol a right of appeal under the provisions of the Act against the assessment by the Municipality does not, in my opinion, necessarily oust the jurisdiction of the civil court to entertain a suit in challenge thereof. Reliance is placed by Mr. Kuttikrishna Menon appearing for the Municipality In support of his contention on a recent decision of a single Judge of this court (Viswanatha Sastri J.) reported in --'Udipi Municipal Council v. Vasudevacharya', (A). There it was held in respect of the property in question that the assessment under Section 81(3) of the Act was rightly made and that, in any event, where the Municipal Council determined the question of fact (whether the site assessed was or was not used exclusively for agricultural purposes) on the evidence and materials available, the civil court cannot assume the powers of the assessing authority and investigate the facts afresh to find out whether its conclusion on the facts is correct.
The passage in the judgment in that case on which stress has been laid by the learned advocate for the appellant is to be found at page 224 as follows:
"If the land was used exclusively for agricultural purposes, the assessing authority had to proceed under Section 81(4) and if not, under Section 81(3). It had power to determine and determined the question of fact on the evidence and materials available and its conclusion was that the land in question was not used exclusively for agricultural purposes. It may be that a different view on the facts is possible. All that can be said for the respondents is that the executive authority of the Municipal Council came to a wrong conclusion on a matter of fact which it was within its competence to decide. 'If so, their remedy was by way of an appeal to the Municipal Council.' The civil court cannot assume the powers of the assessing authority and investigate the facts afresh to find out whether its conclusion on the facts is correct. If on the facts found, assumed or admitted by the assessing authority, the assessment is found to have proceeded on an erroneous basis, the civil courts can step in and declare the invalidity of the assessment on the ground that the provisions of the Act have not been in substance and effect complied with. No statutory body can give itself power to impose a tax on citizens by an erroneous interpretation of the taxing provisions in the statute and if it does so, the aggrieved tax payer has a right to get redress in the ordinary courts. In the present case, however, I am of the opinion that the assessment cannot be assailed on this ground. The error, if any, related to the appreciation of the materials available for arriving at a conclusion on a question of fact which the assessing authority had to determine in the course of making an assessment."
6. The distinction drawn in this passage between cases of an erroneous basis adopted by the Municipality and cases of an erroneous conclusion reached in regard to the existence of the right on statutory basis on the facts found, assumed or admitted by the assessing authority is certainly 'prima facie' in favour of the appellant's contention, and the respondent on the basis of this passage read literally is confined only to the remedy of an appeal to the Municipal Council under the Act and debarred of a suit in the ordinary, courts. I am, however, with respect not prepared to accept this decision as correct if it should be taken as meaning that however arbitrary, capricious or perverse the assessment of the Municipality on the statutory basis may be, the assessee must content himself with an appeal under the Act and cannot resort to a suit for relief. Section 9 of the Civil Procedure Code provides that, "The courts shall (subject to the provisions herein contained) have the jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred;"
The question is whether in respect of a suit of the kind with which we are concerned in the present case, there is any provision of law anywhere which operates as a bar thereto either expressly or impliedly. No bar derived from any other enactment has been suggested, and the only bar in the Act is what is gatherable from Section 354 itself, which comes into being only where the provisions of the Act relating to assessment have been, in substance and effect, complied with. The maintainability of such a suit where there has been no such compliance with the provisions of the Act which is the necessary implication of the section cannot be treated as whittled down or eviscerated by the mere existence of a right of appeal provision in Schedule IV of the Act. While there fs on the one hand, the rule in the schedule which confers on the assessee the right of appeal, we have on the other the plain language of Section 354 in the body of the Act itself which leaves no doubt but that where the provisions of the Act have not been In substance and effect complied with an assessment can well be challenged by reason of a mistake in respect of the amount assessed and that a suit can well be brought to recover any money collected on the basis of such assessment.
7. Reference is next made by the learned counsel for the appellant to a decision in --'the Commissioner, Municipal Council. Vizagapatam v. Siddfswara Devi', AIR. 1949 Mad 189(B), also of a single Judge. The facts there were that upto 1940 a house and site of about 4 acres had been assessed as if the whole of the 4 acres was adjacent and appurtenant to the house, that in 1940 however on the report of a special officer some 3 acres out of the 4 were excluded from the site held to be appurtenant to the house and were separately taxed, and that when a suit to recover the tax in respect of this land was brought by the Municipality the defendants maintained that they were not liable to pay the tax as the site was appurienant to the house. It was held by the learned Judge (Happen J.) that where there was a mistake of fact on the part of the Municipality the remedy was by way of an appeal to the Municipal Council, and that the civil court had no jurisdiction, provided the provisions of the Act had been in substance and effect complied with. It will be seen that so far the ruling does not carry the learned counsel the whole length required, because it lays down that the civil court has no jurisdiction on the facts, provided the provisions of the Act have been in substance and effect complied with. That as much as to suggest that where they have not been in substance and effect complied with, the civil court may well have jurisdiction. The ruling of the learned Judge proceeds further to the effect that even if the site in question should have been held to be appurtenant to the house, that is merely an error of fact in making the assessment which the Municipality had the power to make. But then again the learned Judge proceeds to hedge in his decision in the winding up of the discussion by the remark, ".....and it seems to me clear that there has been no contravention of any express provisions of the Act and no mistaken view of the provisions of the Act. In this view it was not open to the lower courts to go into the question whether the assessment was correct or not."
If one is to regard this ruling -- as I am not prepared to do-- as going the whole length of laying down that in view of the existence of a right of appeal under the Schedule to the Act the remedy of a suit in cases of non-compliance by the Municipality with the provisions of the Act in substance and in effect stands excluded, I must say that I consider this ruling to be erroneous like the ruling in -- (A)'.
8. Stress has also been laid by the learned advocate for the appellant upon a case in --Purnachendra Mala v. President, Taluk Board, Chicacole', 113 Ind Cas 560 (Mad) (C), referred to by Happell J. in -- AIR 1940 Mad 189 (B)'. In that case a suit was brought to recover the amount collected on the ground that the person practised a profession within the limits of the Taluk Board whereas in fact she had not done so. Tt was held that the civil court had no jurisdiction. That again is a decision of a single Judge (Jackson J.) which, as the headnote bears, lays down that under Section 228(2) of the Madras Local Boards Act, where the provisions requisite for the collection of the tax have been followed, and there is merely a mistake of fact committed 'bona fide' by the Pssessing authority, the remedy of the aggrieved party is that provided by and confined to the Statute, namely, an appeal to the Local Board itsrlf. In his judgment the learned Judge, it may bp noticed, points out:
"If the Local Board substantially comply with these provisions no suit will lie and whether it has complied is a question of fact. This is clearly laid down in the lead-ins Madras Case. -- 'Municipal Council of Cocanada v. Standard Life Assurance Co.', In the --'Municipal Council, Mangalore v. Codial Bail Press', 27 Mad 547 (E), it was held that a civil court can intervene when the Municipality has deliberately acted upon a wrong basis in contravention of the clear provision of the Act. In that case it was not an insolated mistake but a fundamental departure from the meaning of the Statute,"
I consider that the test laid down by this decision for the civil court's interference -- namely. a fundamental departure from the meaning of the statute--stands fulfilled in the present case.
9. The true test that must be applied to cases of this description is in my opinion what the Privy Council have laid down in -- 'Secretary of State v. Mask & Co.', AIR 1940 P. C. 105 (F), Lord Thankorton in delivering the judgment of the Board of the Judicial Committee in that case observes at p. III):
"It is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred., but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the civil courts have jurisdiction to examine, into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure."
That case no doubt related to an altogether different enactment, namely, the Sea Customs Act (Act 8 of 1878) and in particular to the provisions of Ss. 188 and 191 thereof. Whether in regard to cases under that Act, where the right of appeal provided for by the Act had been actually exercised by the party aggrieved he would still be entitled to have recourse to a suit is a question on which their Lordships do not express any final opinion. The circumstance that in the case before me the right off appeal provided for by the schedule IV to the Act was exercised is immaterial, in view of my-interpretation of Section 354 of the Act as yielding the plain result on its language that quite apart from the right of appeal a suit does lie where in fact the provisions of the Act have not been in substance and effect complied with. The principle laid down by Lord Tharikerton in --'AIR 1040 P. C. 105 (F)', which I have referred to above is in my opinion a principle of general application which must be held to govern the present case-. Then, it is pointed out that by the learned Lord at p. 110 of the report, referring to a decision of Willes J. in -- 'Wolverhampton New Waterworks Co. v. Hawkesford', (1859) 6 C. B. (N. S.) 336 at p. 356 (G), that the question in such class of cases is whether the case falls under the third class stated by Willes J. namely:
"Where the statute creates a liability not existing at common law, and gives also a particular remedy for enforcing it ..... With respect to that class it has always been held that the party must adopt the form of remedy given by the statute."
That makes no difference to the view I am taking, as it is perfectly clear to my mind on a scrutiny of Section 354 of the Act that in addition to the right of appeal provided for by and in Schedule IV of the Act the right of suit stands saved in all cases in which the provisions of the Art have not in substance and effect been complied with. After all, in the language of Varadachariar J. in -- 'Kamaraja Pandiya Naicker v. Secretary of State', AIR 1936 Mad 269 at p. 272 (H), the appeal in such a case is only to a body acting as part of the Executive machinery and not to an independent body acting as a special tribunal for settling a dispute between the tax payer and the taxing authority. For this reason the Full Bench ruling of this court in -- 'Secretary of State v. Allu Jagannadham', AIR 1941 Mad 530 (I), too can be of no assistance to the appellant. (10) I am accordingly of opinion that the suit in this case was competent, and that this second appeal must fail with the costs of the respondents right through. No leave.