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2012 DIGILAW 127 (KAR)

S. Bhyrappa v. Mysore City Corporation

2012-02-15

RAM MOHAN REDDY

body2012
Judgment :- 1. This is a plaintiff’s second appeal aggrieved by the judgment and decree dated 23.2.2008 of the IV Additional I Civil Judge (Jr.Dn.), Mysore, dismissing O.S.No.326/2006 and the judgment and decree dated 15.6.2010 of the V Additional District Judge, Mysore, dismissing R.A.No.1129/2009. 2. The appellant instituted O.S.No.326/2006 arraigning the respondent as defendant, for the following reliefs: “a) declaring that the demand of double the house tax in respect of schedule premises is illegal, unauthorised and without sanction of law. b) awarding suitable damages for his illegal and unauthorised act in forcing out the reliance company. c) award costs and such other reliefs.” 3. The plaintiff asserted to be the absolute owner of the suit schedule property having constructed the same after obtaining a Commencement Certificate from the Mysore Urban Development Authority and a license from the defendant and an order dated 05.05.93 of regularizing the illegal construction of the building, by levy of penalty by the Mysore Urban Development Authority, at the instance of the neighbour, who instituted O.S.No.87/1992 for demolition of unauthorised construction, which was dismissed on 27.11.1993. It is further asserted that the construction of the building, the plaintiff, though in law is not required to secure a Completion Certificate under Section 310 of the Karnataka Municipal Corporation Act, 1976, (for short, ‘the Act’), put to use the building for commercial activity, whence the state Bank of India was inducted as a lessee, action was initiated by one Mysore Grahakara Parishata and the defendant-Corporation stopped the erection of the communication tower by Reliance Company over a portion of the suit schedule property measuring 30’ x 40’, let out on lease at Rs.8,000/- per month for 20 years, on the premise that the building did not have the Completion Certificate. It was alleged that non-obtaining of the Completion Certificate does not per say make the premise an illegal construction and that the defendant had no jurisdiction to demand double the tax and refuse to receive the normal tax. At paragraph 8 of the plaint, it is stated that the suit is for a declaration that demand of double the tax is illegal, unauthorised and without legal sanction. 4. At paragraph 8 of the plaint, it is stated that the suit is for a declaration that demand of double the tax is illegal, unauthorised and without legal sanction. 4. The defendant, on notice, entered appearance and resisted the suit by filing a written statement asserting that the suit was not maintainable since the plaintiff has an alternative and efficacious remedy of questioning the demand of tax in an appeal proceedings under the Act. In addition, it was contended that the license and sanction of plan dated 31.5.1991, though, was for constructing a residential building nevertheless the plaintiff erected a commercial complex in violation of the sanctioned plan, the zoning regulations under the comprehensive development plan, as also the licence. It was asserted that having not obtained the Completion Certificate from the defendant as contemplated by the Act, the lease of the premises was in violation of the provisions of the Act. In addition it was contended that though the Mysore Urban Development Authority for short ‘MUDA’ regularised the illegal construction on 5.5.1993 by levying a penalty, as approved, by the Government in its Order dated 13.1.1994, nevertheless, this Court in W.P.No.7627/1994 quashed the Government Order. 5. According to the defendant, the building erected contrary to the building bye-laws, the sanctioned plan and licence is an illegal structure, hence liable to penalty and assessment to property tax under the Act. The plaintiff being a wrongdoer, it is alleged has no right to seek damages. The demand dated 13.12.2004 for tax, it is asserted, is in accordance with law and the plaintiff having not challenged it in a statutory appeal before the District Judge, the suit is not maintainable. 6. The Trial Court in the premise of pleadings of parties, framed six issues, of which issue No.4 is over maintainability of the suit. The parties entered trial whence the plaintiff was examined as PW-1 and 27 documents marked as Exs.P-1 to P-27, while the defendant did neither examine witness nor produced documents. 7. The Trial Court in the premise of pleadings of the parties and the evidence, on record placed reliance up on the opinions of this Court in NEELAWWA DECEASED BY HER L.R.’S V/S. BHIMAPPA & ORS (ILR 2006 KAR 2744) and in THE MYSORE CITY CORPORATION, REPRESENTED BY ITS COMMISIONER, MYSORE V/S. D V RAGHURAM, MYSORE & ORS. 7. The Trial Court in the premise of pleadings of the parties and the evidence, on record placed reliance up on the opinions of this Court in NEELAWWA DECEASED BY HER L.R.’S V/S. BHIMAPPA & ORS (ILR 2006 KAR 2744) and in THE MYSORE CITY CORPORATION, REPRESENTED BY ITS COMMISIONER, MYSORE V/S. D V RAGHURAM, MYSORE & ORS. (ILR 2005 KAR 371), to record a finding that the plaintiff had an alternative and efficacious remedy of filing an appeal to the Standing Committee and if aggrieved, an appeal to the District Court and dismissed the suit as not maintainable by judgment and decree dated 23.2.2008. 8. The Lower Appellate Court having reappreciated the evidence and noticed the provisions of the Act coupled with the decisions relied upon by the Trial Court as well as the opinions of the Apex Court in DHULABHAI VS. STATE OF M P & ORS ( AIR 1969 SC 78 ), at paragraph-32 and SRIKANT KASHINATH JITURI & ORS. VS. CORPORATION OF CITY OF BELGAUM ( AIR 1995 SC 288 ), concurred with the reasons, findings and the conclusion arrived at by the Trial Court to dismiss the appeal. 9. Though the appellant is represented by a learned counsel, nevertheless, the appellant-party-in-person submits that the respondent-Corporation could not have made a demand of double the tax for the suit schedule premises merely because the plaintiff did not obtain a Completion Certificate under the Act though Sec.310 of the Act does not contemplate such a Certificate. According to the party-in-person, the Courts below were not justified in dismissing the suit as not maintainable. 10. According to the party-in-person, the Courts below were not justified in dismissing the suit as not maintainable. 10. Having heard the party-in-person, perused the pleading and examined the judgment and decree of the courts below the following facts are not in dispute:- (a) that the plaintiff applied for and secured a sanction of building plan and licence to erect a residential building on the plot of land; (b) that on the date of issue of licence, the plot of land was in a residential zone in the comprehensive Development Plan, under The Karnataka Town and Country Planning Act, for short KTCP Act; (c) that the plaintiff erected a building for commercial activity, in violation of the building plan, building Bye Laws and the Zoning Regulation; (d) that the plaintiff’s neighbour having instituted a O.S.No.87/92 for demolition of unauthorised construction, the plaintiff applied for change of land use which the Mysore Urban Development Authority permitted in exercise of Power under Sec.14A of the KTCP Act and the State Government too accorded approval; (e) that order of the State Government, when called in question by the plaintiff’s neighbour, was quashed by this Court in a writ proceeding and the writ appeal was dismissed directing the Mysore City Corporation and MUDA to dispose off the plaintiff’s application in accordance with law; (f) that the plaintiff put to commercial use the premises by letting it out on lease to State Bank of India, while the erection of a tower on the building by M/s. Reliance Company was stalled by the Mysore City Corporation; (g) that the plaintiff submitted a return under sec.112A of the Act, for the year 2002-2003 as self assessment of the building for municipal tax, following which the Mysore City Corporation issued a demand Ex.P24 assessing the plaintiff’s property to tax; (h) that the plaintiff did not file objections to the demand notice nor question the same in an appeal under the Act. 11. In order to better appreciate the submission of the party in person, it will be useful to refer to the relevant provisions of the Act. 11. In order to better appreciate the submission of the party in person, it will be useful to refer to the relevant provisions of the Act. Sec.310 of the Act provides for completion certificate and permission to occupy or use the building after erection requiring the person who has erected the building to send or cause to be delivered or sent to the Commissioner at his office notice in writing of such completion, accompanied by a certificate in the form prescribed in the bye-laws signed and subscribed therein and shall give to the Commissioner all necessary facilities for inspection of such building or all such work and shall apply to occupy the building. Sub-sec.(2) prohibits a person from occupying or permitting the building to be occupied or used or permit to be used the building or part thereof until (a) permission has been received from the Commissioner in this behalf, or (b) the Commissioner has failed for thirty days after receipt of the notice of completion to intimate his refusal of the said permission. 12. Apparently the plaintiff did not submit a completion certificate nor apply for permission to occupy the building after its construction. In that view of the matter, the use to which the building was put to by the plaintiff ie., for commercial activity by letting it out to State Bank of India, was illegal. The submission of the party-in-person that Sec.310 of the Act does not contemplate the submission of completion certificate, is without merit. 13. Sec.112(A) provides for assessment of property tax where under every owner or occupier, who is liable to pay property tax under the Act shall every year submit to the Commissioner or the Officer authorised for him in that behalf to return any such form within such period and in such manner as specified in Schedule III. Under Sub-sec.(3) of Sec.112(A), it is for the Commissioner or the Authorised Officer, if satisfied, that in the return submitted under Sub-sec.(1) is correct and complete, shall assess the property tax in accordance with the provisions of the Act and the rules made thereunder and shall send a copy of the order of assessment to the owner or occupier concerned. Under Sub-sec.(3) of Sec.112(A), it is for the Commissioner or the Authorised Officer, if satisfied, that in the return submitted under Sub-sec.(1) is correct and complete, shall assess the property tax in accordance with the provisions of the Act and the rules made thereunder and shall send a copy of the order of assessment to the owner or occupier concerned. In Sub-sec.(6), the owner or occupier is entitled to either accept the property tax assessed and the penalty if not levied or send objections to the Commissioner or authorised officer within the period of 30 days from the date of receipt of the copy of the order under Sub-sec.(3). Sub-sec.(7) invests in the Commissioner or the authorised officer, jurisdiction to consider the objections and pass such order either confirming or revising the assessment of such tax and penalty, if any, within a period of 60 days from the date of filing objections and a copy of the order shall be sent to the owner or occupier concerned. 14. Sec.113 of the Act reads thus: “113 – Demand for payment of property tax and appeal against such demand – (1) If the property tax including penalty leviable under sub-section (5) of Section 112-A is not paid after it has been become due, the corporation may cause to be served upon the person liable for payment of the same a notice of demand in such form as may be prescribed. (2) If the person to whom a notice of demand has been served under sub-section (1) does not, within thirty days from the service of such notice of demand either – (a) pays the sum demanded in the notice; or (b) prefers an appeal under sub-section (3) against the demand, he shall be deemed to be in default and thereupon such sum shall be recovered along with such penalty and in such manner as may be prescribed. (3) Notwithstanding anything contained in Section 61-A or 62 or 444, any person disputing the claim in the notice of demand served under sub-section (1), may within thirty days after the service of such notice, appeal in such manner subject to such conditions and to such authority as may be prescribed. 15. Rule 19 of Part I in Schedule III to the Act, relating to Taxation rules reads thus: “19. 15. Rule 19 of Part I in Schedule III to the Act, relating to Taxation rules reads thus: “19. An appeal against any claim included in the notice of demand served under sub-section (1) of Section 113 may be made to the District Court having jurisdiction over the area concerned; Provided that no such appeal shall be heard and determined unless an application in writing, stating the grounds on which the claim is disputed has been made and the amount admitted by the applicant has been deposited by the applicant in the Corporation Office. 16. The Apex Court in DHULABHAI’S case supra, having regard to the diverse views expressed by it in a large number of cases in the matter of exclusion of civil court’s jurisdiction summarised its opinion thus: “32. Neither of the two cases of Firm of Illuri Subayya, 1964-1 SCR 752 = ( AIR 1964 SC 322 ) or Kamla Mills, 1966 1 SCR 64 = ( AIR 1965 SC 1942 ) can be said to run counter to the series of cases earlier noticed. The result of this inquiry into the diverse views expressed in this Court may be stated as follows: (1) Where the statute gives a finality to the orders of the special tribunals the Civil Courts’ jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not. (3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals. (4) When a provision is already declared unconstitutional, or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit. (5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies. (6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry. (7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply.” 17. In SRIKANT’S case supra, the Apex Court having regard to Rule 25 contained in Part-1 of Schedule III of the Karnataka Municipal Corporations Act, 1976, held that a suit against enhancement of property tax on the allegation that the enhancement is excessive being arbitrary and unreasonable, was held to be per se not sufficient to override the express statutory bar against institution of a suit under Rule 25. 18. 18. In the MYSORE CITY CORPORATION’S case supra, a learned Single Judge having regard to the provisions of the Act and the Taxation Rules and applying the principles laid down in DHULABHAI’S case supra, as also in SRIKANTH KASHINATH JITURI’S case supra, held that a suit was not maintainable to declare the assessment order passed by the Commissioner as arbitrary and illegal and that the aggrieved party has to prefer an appeal before the competent authority. 19. Regard being had to the principles laid down in DHULABHAI’S case supra, and the observations in SRIKANTH KASHINATH JITURI’S case and applying the same to the facts of this case, it is needless to state that the plaint averments disclose a challenge to the demand notice on the premise that it is in the nature of a double the amount of tax on the immovable property in question, hence the relief to declare it illegal, which when opposed in the written statement on the specific stand that the suit was not maintainable in the light of the provisions of the Act, expressly providing an appeal to the District court against the assessment and demand of tax, the suit is not maintainable. The plaintiff has a remedy of an appeal before the district court under Rule 19 of the Taxation Rules. 20. It must also be noticed that the plaint averments do not disclose a challenge to the demand notice in the manner set out in the principles in DHULABHAI’S case so as to invoke the jurisdiction of the Civil court under Sec.9 of CPC for the relief of declaration that the demand notice is null and void. The mere non-compliance with the provisions of the statute by itself and nothing more would not mean non-compliance of fundamental provisions of the statute so as to make the entire proceeding vitiated at the hands of the defendant/Corporation, as being one without jurisdiction. It is significant to note that the machinery under Rule 19 of the Taxation Rules under Schedule III to the Act being the prescription for the purpose of Sec.113(1) of the Act provided for rectifying errors or irregularities in the demand notice, the courts below were fully justified in dismissing the suit as not maintainable. Since no substantial question of law arise for decision making, the appeal is dismissed.