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2002 DIGILAW 194 (DEL)

MUNICIPAL CORPORATION OF DELHI v. HOTU RAM

2002-02-08

P.C.JAIN

body2002
R. C. Jain ( 1 ) THIS Second appeal is directed against the judgment and decree dated 17. 8. 79 passed by the additional District Judge, Delhi thereby allowing the first Appeal filed by the respondent against the dismissal of his suit. ( 2 ) BRIEFLY stated the relevant facts giving rise to the appeal are that the respondent herein had filed a suit for permanent injunction against the appellant-MCD for restraining them from recovering; a duty of Rs. 1505. 00 on the transfer of a shop No. 57, Old rajinder Nagar, New Delhi levied under the provisions of Section 147 (2) (b) (i) of the Delhi Municipal corporation Act, 1957 (hereinafter REFERRED TO to as the act) asking its payment-by means of a notice. The said levy and demand of the duty was stated to be illegal, ultra vires and against the principles of natural justice firstly because. no stamp duty was payable under the Indian Stamps Act or was leviable on the transfer of leasehold rights of the property in dispute under the Act and that plaintiff was not afforded an opportunity to raise his objections against the levy of the said duty. The suit was contested by the appellant-Corporation on a variety of grounds viz. being barred by the provisions of section 169/170 of the Act and also challenging the jurisdiction of the Civil Court to entertain and try the suit in view of provisions of Section 477/478 of the Act. ( 3 ) ON the pleadings of the parties, the trial court framed the following issues :- "1) whether the demand of the defendant for Rs. 1505. 00 is illegal, untravires and without Jurisdiction on grounds,stated in para, 5 of the plaint?opp 2) whether suit is barred in view of sections 169-170 of D. H. C. Act?opd 3) whether this court has no jurisdiction to try the suit?opd 4 ) whether suit in the present form is not maintainable?opd 5) whether suit not maintainable in view of sections 477/478 of D. M. C. Act?opd 6) Whether plaintiff is entitled to relief claimed? ( 4 ) THE learned trial court though held the suit to be maintainable and not barred by the provisions of section 169/170 and 477/478 of the Act answered the issue No. 1 against the plaintiff holding that the demand of Rs. 1500. ( 4 ) THE learned trial court though held the suit to be maintainable and not barred by the provisions of section 169/170 and 477/478 of the Act answered the issue No. 1 against the plaintiff holding that the demand of Rs. 1500. 00 was legal and justified as the transfer of the suit property was sale of immovable property within the meaning of Section 147 (1) (b) (i) of the Act and therefore levy of the duty was legal. ( 5 ) THE first Appellant Court, however, took a contrary view that the Municipal Corporation of Delhi was not legally entitled to recover the transfer duty from the plaintiff primarily on the parity of reasoning that the Sub-Registrar-responsible for the registration of the Transfer Deed had not asked for the payment of the such duty at the time of registration of the deed and secondly the said transfer deed was not covered under Section 147 of the Act and therefore MCD is not entitled to levy any duty and raise a demand on the plaintiff. Accordingly the suit of the plaintiff was decreed and the MCD was restrained from recovering the amount of Rs. 1505. 00 as duty on transfer of the property vide Transfer Deed exhibit P-2. Aggrieved by the said judgment, the MCD has come up in the present appeal. ( 6 ) THE appeal was admitted for hearing by this court vide an order dated 10/1/80 to consider the following questions of law :- " (1) whether the transfer/sale of leasehold rights does not amount to sale of immovable property, within the meaning of section 147 (2) (b) (i) of the Corporation act. (2) Whether the term sale of immovable property under Section 147 (a) (b) (i) of the Corporation Act is not transfer of property within the meaning of Section 5 of the Transfer of Property Act, 1882, and if so, what is its effect ? (3) whether the transfer of ownership rights and not the leasehold rights amount to sale of immovable property under section 147 (2) (b) (i) of the Corporation act, and as such transfer of leasehold rights is not liable to transfer duty?" ( 7 ) I have heard Shri Maheshwar Dayal, learned counsel for the appellant and Ms. Ratna, learned counsel for the respondent and have given my thoughtful consideration to their respective submissions. Ratna, learned counsel for the respondent and have given my thoughtful consideration to their respective submissions. At the outset, learned counsel for the appellant-Corporation has placed reliance upon a decision of three Judges special Bench of this Court in the case of m/s. Sudarshan Talkies (Delhi) Pvt. Ltd. New Delhi Vs. The Collector of Stamps, AIR 1978 Delhi 112 which ruled as under :~ " The duty leviable, under Section 147 of the Corporation Act is in the form of surcharge levaible under the said Act over and above the stamp duty. The transfer duty is thus assessed independently of the stamp duty. The transfer duty is assessed on the amount of consideration for sale as set forth in the instrument of conveyance. The proceeds so collected are credited to the fund of the corporation. That being so, a conveyance deed cannot be impounded under Section 33 of the Stamp Act, nor can it be subjected to penalty under Section 40 of the said Act for failure to pay the duty envisaged by section 147 of the Corporation Act. AIR 1972 Delhi 131 (SB) Rel. on. The view that the provisions of section 147 is in the nature of increasing the stamp duty and cosequently any default in the payment of this surcharge would attract all be provisions of the Stamp Act including "impounding of documents and imposition of penalty" is unwarranted on a plain reading of Section 147. " ( 8 ) THE learned counsel for the respondent has not disputed the above legal preposition and the authority and competence of the MCD to levy the duty under Section 147 of the Act over and above the stamp duty payable on the registration of a transfer deed and rightly submitted that this is not the question of law for consideration on which this appeal was admitted for hearing. Accordingly, I proceed to consider and answer the above REFERRED TO questions which are interconnected. In the case in hand, the duty was levied by the appellant-MCD under Section 147 (2) (b) (i) of the Act deeming the transfer deed exhibit P-2 dated 16. 5. 74 as the sale of immovable property. Accordingly, I proceed to consider and answer the above REFERRED TO questions which are interconnected. In the case in hand, the duty was levied by the appellant-MCD under Section 147 (2) (b) (i) of the Act deeming the transfer deed exhibit P-2 dated 16. 5. 74 as the sale of immovable property. Section 147 of the Act reads as under :- 147 "duty on transfer of property and method of assessment thereto- (l) Save as otherwise provided in this Act, the Corporation shall levy a duty on transfers of immovable property situated within the limits of delhi in accordance with the provisions hereafter in this section contained. (2) The said duty shall be levied- (a) in the form of a surcharge on the duty imposed by the Indian Stamp act, 1899 (2 of 1899) as in force for the time being in the Union territory of Delhi, on every instrument of the description specified below, and (b) at such rate as may be determined by the corporation not exceeding five per cent. , on the amount specified below against such instruments: 195. htm ( 9 ) COMING to the question whether the transfer/sale of leasehold rights amounts to sale of immovable property or not within the meaning of Section 147 (2) (b) (i) of the Corporation Act, it may be noted at once that the plaintiff himself was not the absolute owner of the property in question bearing Shop No. 57, old Rajinder Nagar, New Delhi and he was simply a lessee of the said shop under a 99 years term of perpetual lease deed executed on behalf of the Govt. of India in his favour. The plaintiff transferred the same vide a transfer deed titled as sale deed dated 16. 5. 74 (Exh. P-2) on record. The learned counsel for the appellant has heavily relied upon the title of this document which reads "sale Deed" and certain other recitations where the expressions such as "the Vendor is the exclusive owner and in possession of Government built. . . " That the Vendor is permitted to sell the said Government built shop. . . . . ," That the Vendor for his legal needs and requirements had agreed to sell the said Government built shop. . . . . . . . " That the Vendor is permitted to sell the said Government built shop. . . . . ," That the Vendor for his legal needs and requirements had agreed to sell the said Government built shop. . . . . . " "vendor doth hereby sell, convey and transfer all rights, titles and interest of the said shop as well as the leasehold rights of the land under the said shop and thereafter shall become the owners of the said property and shall enjoy all the rights of ownership of the said property. . . . . . . " used in the. transfer deed in order to fortify his contention that the transaction effected by means of this deed was nothing but sale within the leaning of the Transfer of property Act. ( 10 ) AS against this, the contention of learned counsel for the respondent is that the above REFERRED TO recitations in the Transfer Deed were illusory and did between the parties. The plea of the petitioners with regard to the waiver ,df notice arising from the conduct of the defendant in not raising the proposed objections can always be taken up and answered by the trial court at the appropriate stage but amendment of the written statement, cannot be refused at this stage by presuming that the defendant had waived their rights in regard to the notice. ( 11 ) THUS having considered the matter in its entirity, this Court is of the considered opinion that on the face of the facts and circumstances of the case, the learned trial court was justified in allowing the amendment application of the respondent-NDMC and permitting them to raise the aforesaid objections in their written statement. It would, however, be open to the petitioners, to raise such objections/pleas with regard to the waiver of the notice etc. as may be available to them in their rejoinder to the amended written statement and the learned trial court shall dispose of the same in accordance with law. The impugned order does not suffer from any illegality. material irregularity or any other infirmity with calls for any interference by this Court. The revision peitition is according dismissed.