Balakrishna Mehat vs Corporation of Madras

Srinivasan, J.

(1) When this appeal came up for hearing before the Division Bench, the learned Judges felt that the earlier decision of this court in Madura

Municipality Vs. P.M.S. Muthusami Chettiar, , took a view of the provisions of the Madras Town Planning Act which they were inclined to dissent

from. Accordingly, this appeal has been posted before this Full Bench for disposal.

(2) The principal question that arises in this appeal is whether the civil court has jurisdiction to go into the question of the increase in value or the

likelihood of increase in value or the likelihood of increase in value of any properties involved in a town planning scheme by the making of that

scheme. Even at the outset we may preface our discussion by stating that the Division Bench which decided Madura Municipality Vs. P.M.S.

Muthusami Chettiar, , held that there is no provision in the Town Planning Act, as to who should decide the important question whether any

property has increased in value or is likely to increase in value by the making of the town planning scheme. It was upon this aspect of the matter

that the Judges who have referred this appeal were inclined to differ from the learned judges who decided Madura Municipality Vs. P.M.S.

Muthusami Chettiar, . The point that therefore arises for decision at present is whether the Act does or does not contain any provision as to the

determination of the increase in value or the likelihood of increase in value as a result of the making of the town planning scheme. For purposes of

the town planning scheme. For purposes of completeness, we would like to set out the facts leading to this appeal.

In pursuance of the provisions of the Madras Town Planning Act, a draft scheme, known as the Thousand Lights Area Town Planning Scheme,

was prepared by the Corporation of Madras. As required by S. 14 of that Act, this scheme was sanctioned by the State Government and was

duly published in the Fort St. George Gazette, under S. 14(5) of the Act. An arbitrator was appointed to perform the functions specified in S. 27

of the Act. It was provided by Cl. 22 of the scheme that ''claims for betterment contribution under S. 23 of the Act shall be submitted to the

arbitrator within 2 years of the date of the scheme.'' It was further provided that the contribution may be levied for a term of 20 years at a uniform

rate of 7-1/2 per cent of the increase in value calculated in accordance with the provisions of the Act. In due course, the Corporation preferred a

claim before the Arbitrator under S. 23 of the Act claiming that the properties covered by the scheme had increased or were likely to increase in

value by the making of the town planning scheme. As required by form 20, prescribed under the rules framed by the Government, they also

specified in their application the valuation of the properties as at the date of the publication of the notification under S. 12 of the Act. The Arbitrator

gave his decision and in so far as the properties concerned in this appeal are concerned, held that they were liable for the betterment contribution

under S. 23 of the Act, and he also recorded the marked value of these properties at the date of the notification under S. 12. It may be mentioned

at this sage that though the other property owners, in respect of whose properties also claims for betterment contribution has been made by the

corporation, appear to have appealed under S. 29 of the Act against the decision of the Arbitrator, the appellant before us did not adopt that

course in respect of the determination by the arbitrator relating to his properties.

In October 1948, the Corporation made demands for betterment contribution on the basis of the increase in value of these properties over their

value as on the date of the publication of notification as determined by the Arbitrator. The appellant preferred revision petitions to the

Commissioner and on the dismissal of those revision petitions, he preferre4d appeals to the council. Those appeals were also dismissed. It is stated

in the plaint that on foot of demands issued by the Corporation, a sum of Rs. 7,613-9-9 had been collected from the appellant and that further

demands to a like amount are still pending against him. At this stage the suit was filed contending that the suit properties derived no amenity or

benefit of any kind whatsoever from the making of the town planning scheme and that the proceedings under the Act leading to the levy of the

betterment contribution and the collection thereof are all illegal and ultra vires. It was claimed also that any increase in the marked value of the

properties subsequent to the date of the notification under S. 12 of the Act was due to the situation of the property on the Mount Road and not at

all the result of the notification of the properties in the town planning scheme. on those averments the suit was said for a declaration that the suit

properties are not liable to the levy and for the recovery of the amounts so far levied and collected.

(3) The only contention of the defendant that we need consider is that the civil court has no jurisdiction, the Act having provided otherwise for the

purpose of the determination of the points in controversy. In effect, therefore, the question resolves itself into one of determining whether the

decision of the Arbitrator under S. 27(1)(d) of the Act is final, and whether the civil court is precluded from dealing with the question whether any

particular property is or is not liable to betterment contribution.

(4) The learned Judge of the City Civil Court came to the conclusion that in his opinion the increase in the value of the properties in question was

not due to the making of the town planning scheme and that such increase was attributable to other extraneous circumstances and that the

Corporation had no jurisdiction to levy betterment tax; he nevertheless held that the decision of the Arbitrator in this regard had become final and

that the suit is not maintainable. He distinguished the decision in the Madura Municipality Vs. P.M.S. Muthusami Chettiar, , on the facts, as he

thought that in that the Arbitrator had failed to perform the duty cast upon him, viz. The determination of the question whether or not the property

had increased or was likely to increase in value. He concluded that the civil court had no jurisdiction and dismissed the suit.

(5) If we may say so with respect, the order of the referring Bench sets out the several provisions of the Act which alone require to be considered

in this connection. Nevertheless, in view of the fact that we have to examine the correctness or otherwise of the decision in Madura Municipality

Vs. P.M.S. Muthusami Chettiar, , we have to examine the relevant provision of the Act.

(6) We may start at the stage where the draft scheme submitted by the Corporation is approved by the State Government. Sec. 14, subsec. (6)

states:

A notification published under sub-sec. (5) shall be conclusive evidence that the scheme has been duly made and sanctioned. The scheme shall

have effect from the date of publication of such notification and the execution of the scheme shall be commenced forthwith.

This provision makes it clear that the scheme becomes effective from the date of the publication; that is to say, the consequences of the making of

the scheme are not dependent upon the execution of the scheme. This inference derives support from S. 20 of the Act which provides that any

person whose property is injuriously affected by the making of a town planning scheme shall be entitled to obtain compensation in respected

thereof from the municipal council. There is also the further provision under S. 22-A which renders it possible for the municipal council to apply for

the withdrawal or modification of all or any of the provisions of the scheme in any case where a person making a claim under S. 20 of the Act

obtains an award of compensation. These incidents refer to a stage before the actual execution of the scheme is undertaken. There is accordingly a

clear distinction found in the Act between the making of a scheme and the execution thereof. We make particular reference to this feature for the

reason that in the decision in Madura Municipality Vs. P.M.S. Muthusami Chettiar, , there appears to be a suggestion that the increase or the

likelihood of an increase in the value of the properties effected by the scheme depends exclusively upon the execution of the scheme itself.

(7) Under S. 27(1)(a), the appointment of an arbitrator is provided for. In so far as they are relevant to the present appeal, his functions are set out

in sub-sec. (1) (d) of that section in these terms:

To determine, in reference to the claims made, the properties which are liable to the betterment contribution under S. 23 and estimate and record

their market value at the date of the notification under S. 10 or S. 12 as the case may be in accordance with the provisions of clause (a) of S. 24.

The Arbitrator is thus entrusted with two duties: (1) the determination whether any property is liable to betterment contribution under S. 23 and (2)

to estimate the market value of that property in accordance with clause (a) of S. 24. Turning to S. 23, it is seen that the Corporation is entitled to

make a claim for betterment contribution ""where by the making of any town planning scheme, the value of any property has increased or is likely to

increase."" What therefore the Arbitrator is called upon to decide is whether the property in question has either increased in value or is likely to

increase in value by the making of the scheme. The two alternatives relating to the increase in value appear to have been designedly put in. It is

possible that by the very fact that a town planning scheme envisaging the provision of better amenities and facilities to the residents of the locality

had been sanctioned and was to be put into effect might increase the value of the properties. It is true that till the scheme is actually executed and

the amenities are in fact provided, such increase might be only on a speculative basis. It is clearly to cover this potential increase in value that the

expression ""or is likely to increase"" has been included in the section.

There may also be other cases where ever by the date when a claim is put in by the Corporation (the scheme in the present case gives a period of

two years from the date of the publication for the filing of the claim) the connected properties might actually have appreciated in value. While in the

one case the Arbitrator would very likely have evidence of an actual increase in value of the property as a result of the scheme, in other case the

potentiality of the improvements intended to be executed might reasonably lead to the conclusion that the properties were certainly likely to

increase in value any event, the arbitrator is at that stage called upon to decide whether the property has so far increased or is likely to increase in

value. If he comes to either of these conclusions, he is competent to say that those properties are liable for the betterment contribution. There is no

other condition which he is called upon to consider. Indeed, in Form 20, framed under rule 55(1) of the Madras Town Planning Rules, the claim

put in by the Corporation gives clearer expression to the content of S.23 in this regard. At this stage it is only a claim that is made by the

Corporation, and in this form the Corporation states that the properties are increased in value or are likely to increase in value by the making of the

scheme, that the Council is thereby entitled to recover betterment contribution from the owners in accordance with the provisions of the scheme,

and requests the Arbitrator to declare the liability of the properties for betterment contribution and to determine the market value of each property

on the date of the notification under S. 12.

It seems clear to us that even the mere likelihood of an increase in the value of the properties as a consequence of the making of the scheme is

sufficient, if the Arbitrator is so satisfied, to entitle him to declare that the properties are liable for the betterment contribution. We may point out

that in this very case it was represented to me at the Bar that out of the several properties that were so dealt with by the Arbitrator, some were

held not liable to betterment contribution on the ground that they were not likely to increase in value as a result of the making of the scheme. It is

also not denied that some of the other property owners affected by the scheme in a like manner appealed against the decision of the Arbitrator

under S. 29 of the Act, and succeeded in establishing before the appellate court, that their properties were not liable to increase in value. We refer

to this feature, viz., that the decision is that of the Arbitrator subject to an appeal under S. 29 of the Act and not any decision of the council of the

Corporation regarding the likelihood of increase in value; for we find that the learned Judges who decided Madura Municipality Vs. P.M.S.

Muthusami Chettiar, , observed in more than one place that it is the municipal council that decided this question.

(8) We accordingly reach the position that in a case where the scheme has not been put into execution, the determination of the Arbitrator under S.

27(1)(d) of the Act results in this. He decides that the property is likely to increase in value by the making of the scheme and consequently is liable

for the betterment contribution. He also estimates and records the market value of the property as on the date of the notification under S. 12 of the

Act. In fixing that value, under S. 24(A) of the Act, the Arbitrator is bound to ignore any improvements ""contemplated"" in the scheme; that is to

say, the value of that property has to be estimated on the basis that there was no scheme to be put into effect. What follows thereafter relating to

the actual levy and collection of the contribution is no part of the functions of the Arbitrator. It is necessary now to set out the manner in which this

levy is made.

(9) Section 24(b) provides that is each of the financial years following that in which the scheme takes effect, the market value of each property

liable to pay the contribution shall be estimated by the Chairman, Sub-cl. (D) lays down that if in any financial year the market value estimates as

above exceeds the market value recorded by the arbitrator, the municipal council shall levy a betterment contribution on the difference according to

the percentage fixed in the scheme S. 25(2)(a) is important, and it is set out in extenso:

The State Government may make rules for the assessment and collection of betterment contribution, and subject to such rules (1) the Chairman

shall have the same powers and shall adopt the same procedure for the assessment and collection of the betterment contribution as he has for the

assessment and collection of the property tax; (2) persons affected shall have the same right to receive notice of assessment and to object to the

assessment and to appeal in respect thereof as they have in respect of the property tax; and (3) decisions on appeal shall to the same extent be

final and conclusive.

The rules under the Madras Town Planning Act give effect to this provision contained in S. 25(2)(a) and provide for revision petitions against the

assessment to betterment contribution in any year, for the disposal of such petitions and for appeals from the decisions of the Commissioner of the

Corporation of Madras to the Council. It is important to notice that in so far as the levy of the betterment contribution is concerned, it is placed in

the same position as property tax and both the Council and the persons affected are given the same rights as they have in respect of the

assessment, levy and collection of the property tax. We once again emphasise that in so far as the actual levy and collection of the betterment tax is

concerned, the Arbitrator appointed under S. 27 has no longer any part to play.

(10) On a consideration of these provisions, it seems abundantly clear that on the two vital questions that affect the liability of the owner of the

property affected by the making of the scheme, viz., the liability of the property for betterment contribution and fixation of it market value as on the

date of the notification under S. 12 of the Act, the Act provides a special machinery. An arbitrator is appointed to determine these two questions,

and subject to an appeal from his decision to the District judge in cases arising outside the City of Madras, or the Chief Judge of the Court of Small

Causes at Madras, in cases arising in the City of Madras, the decision of the arbitrator under S. 27(1)(d) is declared to be final by S. 29(2) of the

Act. Prima facie, therefore, where the scheme of the Act vests the jurisdiction for the determination of certain questions to a special authority and

declares further that the decision of that authority shall be final and binding on all persons, the conclusion seems to be irresistible that the civil

court''s jurisdiction to entertain the very same questions is taken away. The learned Judges who decided Madura Municipality Vs. P.M.S.

Muthusami Chettiar, , appear to have been inclined to the view that the Act contained no provision to deal with the question whether any property

has increased in value or is likely to increase in value by the making of a town planning scheme; and the absence of any provision to deal with a

case where a person was injuriously affected led them to hold that the civil court must necessarily have jurisdiction. We have accordingly to

examine the reasoning of the learned Judges at some length to determine whether the conclusion that they reached is supported by the provisions of

the Act.

(11) Mr. Ranganatha Sastri, for the appellant, in seeking to support the conclusion reached in Madura Municipality Vs. P.M.S. Muthusami

Chettiar, argues that what the arbitrator is called upon to do under S. 27(1)(d) is not to determine whether the making of the scheme has resulted

in the increase of the value of any property or in the likelihood of such an increase of value, but only to set out which properties are geographically

affected by the scheme. We are unable to accept this interpretation of the relevant provision. In terms, S. 27(1)(d) directs the arbitrator to

determine the properties which are liable for the betterment contribution under S. 23. Section 4 of the Act which prescribes the matters that may

be dealt with in the scheme provides for the laying out of the land as building sites or for any purposes mentioned in the section, the construction,

extension or alteration of streets or roads, the redistribution of boundaries and reconstitution of plots belonging to owners of properties comprised

in the scheme, provision of facilities such as transport, water supply, laying drainage etc., the acquisition of any land within the area included in the

scheme and such other objects Sec. 5 which deals with the reconstitution of plots provides for the transfer of ownership of one plot from one

person to another, allotment of a plot to any person dispossessed of land in furtherance of the scheme and the alternation of boundaries of plots.

It is clear therefore that the properties comprised in any scheme stand to be affected both to the advantage and the disadvantage of their owners in

the sense that while the provisions of various hitherto non-existent facilities would conduce to the better enjoyment of their properties, in other

instances, the property owners might be deprived of their properties by the acquisition for purposes of laying out reads and the like, or even by a

reduction in the size of their properties. It is for purposes that have been briefly set out above that the State Governments requires the Corporation

to prepare and publish the draft scheme ""as respects any land in regard to which a town planning scheme may be made."" S. 13 which sets out what

details should be contained in any draft scheme specifies that the ownership of all lands and buildings in the area to which the scheme relates should

be set out in the draft scheme. It is clear therefore that both at the time of the publication of the draft scheme under S. 12 of the Act and the

subsequent publication of the notification under S. 14(5) of the Act, the scheme clearly sets out what are the properties in the area to which the

scheme relates, the proposed lay-outs and the alternation of the boundaries of the properties of the several owners and such other features. It

should, therefore, follow that the scheme as published determines effectively the nature extent and identity of the properties which are affected by

the scheme.

Indeed, in the very notification relating to the present scheme that has been placed before us, the schedule thereto sets out the various door

numbers, survey numbers and sub-divisions, the extents, the names of the owners, the description of the property and other details under the

heading ""ownership and extent of the land included in the scheme."" That being the case, we are wholly at a loss to appreciate the argument

advanced by Mr. Ranganatha Sastri that the direction contained in S. 27(1)(d) of the Act calling upon the Arbitrator to determine the properties

which are liable for the betterment contribution is nothing more than a geographical determination of the properties which are affected by the

scheme. Such a geographical determination has already been made and hardly requires the appointment of an arbitrator. On the other hand, it is

clear that the appointment of an arbitrator is made mandatory upon the State Government in cases ""if so required by the Council or any person

interested in the scheme"". The duty cast upon the arbitrator under S. 27(1)(d) is to determine the liability for betterment contribution in reference to

the claims made by the Corporation or the Council, as the case may be. In the performance of these duties, the arbitrator has been conferred with

all the powers of a civil court for the purpose of taking evidence on oath, enforcing the attendance of witnesses and compelling the production of

documents. His decision is subject to an appeal under S. 29 of the Act.

In view of all these features, it seems to us to be quite clear tha the determination of the liability of the properties for betterment contribution is on

the basis of a claim made by the Corporation and objection thereto by the owner of the property affected by the claim; the determination is

certainly of a quasi-judicial nature, subject to appeal to the court of Small Causes. There is no doubt, therefore, that the scope of the arbitrator''s

duties in this regard is not a mere geographical delineation of a property in relation to the scheme but the factum of its liability to contribute to the

cost of the scheme by way of betterment tax, and that liability is under the terms of S. 27(1)(d) itself related to S. 23, which refers to the increase

in value or the likelihood of the increase in value or the likelihood of the increase in value of the property by the making of any town planning

scheme.

(12) In Madura Municipality Vs. P.M.S. Muthusami Chettiar, a town planning scheme was sanctioned by the Government on the 21st April 1943.

On the filing of claims by the Municipal Council, an arbitrator was appointed and in respect of the properties concerned in the suit which gave rise

to the decision, he declared that they were liable for betterment tax. He also fixed the value of the properties as on the date of the notification under

S. 12 of the Act. In pursuance of the further provisions of the Act, the Municipal Council purported to value the properties at the commencement

of each succeeding financial year and sought to levy betterment tax in accordance with the percentage fixed in the scheme. The usual revisions to

the Commissioner and the appeals to the Council failed. The suit was laid alleging that the proceedings under the Town Planning Act were illegal,

and void and ultra vires, as no increase or likelihood of increase in value of the suit properties could be stated to have been due to the making of

the alleged scheme. The defence to the plaint was similar to that in the present case. Viz., that the arbitrator''s award had become final and that S.

29 of the Act precluded the plaintiff from challenging the levy of betterment tax as not sustainable. The Subordinate Judge who heard the suit found

in favour of the plaintiff''s contentions, and against that, the matter came to the High Court in appeal. Basheer Ahmed Sayeed J. Set out the point

that arose for consideration thus:

What is the scope and the real implications of the awards made by the arbitrator?

After referring to Secs. 23, 25 and 27 of the Act, he said:

This right of the municipality to claim an annual betterment contribution is conditioned by what is stated in the first part of the section, viz., ''where

by the making of any town planning scheme the value of any property has increased or is likely to increase''. The intention is that is only when this

condition is fulfilled that the Municipality becomes entitled to claim an annual betterment contribution from the owner of the properties included in

the scheme. The Municipality therefore can make a claim for betterment contribution from the owner of the property included in the scheme only if

and when the value of the property included in the scheme has increased or is likely to increase by the making of any town planning scheme. In

other words, if the value of any property has not increased or is not likely to increase, the Municipal Council concerned may not be entitled to

make any claim in that behalf and much less to recover any annual betterment contribution from any of property included in any scheme. The right

to recover betterment contribution could, therefore, arise only from the fact of the value of the property having increased or its being likely to

increase by the making of the scheme.

So, far the learned Judge was only setting out what is contained in the section itself. But he proceeded to say:

Therefore, the fact whether any property has increased in value or is likely to increase in value by the making of any town planning scheme is the

governing factor and that is what entitled the Municipal Council to recover the betterment contribution. But neither this section nor any other

sections in the Town Planning Act make it clear as to who should decide on this important question. From the rules framed under the Town

Planning Act, however, it is to be gathered that this fact is left to the decision of the Municipal Council and the discretion to make a claim or not on

that basis seems also to be left to the Municipal Council. The scheme of the Act also seems to be that when the Municipal Council once comes to

the conclusions that the value of any property has by reason of the making of the town planning scheme increased or is likely to increase, it can

make a claim for the purpose of recovering an annual betterment contribution in accordance with the provisions made in the said scheme. After

taking such a decision, then the municipality has to make a claim for betterment contribution and when that claim is made, it is placed before the

arbitrator appointed under S. 27 of the Act and the arbitrator is then called upon to determine in reference to the claims made by the municipality

the properties which are liable to betterment contribution and estimate and record the market value of the property at the date of the notification in

accordance with the provisions of S. 24(a).

(13) We may observe in passing that while the learned Judge correctly states that the proposition that the Municipal Council has to decide for itself

whether it should make a claim or not make a claim for betterment contribution, the underlying suggestion in the above extract that that decision is

final seems to be inconsistent with the position which the learned Judge himself accepts, viz., that the arbitrator has to determine the reference to

the claims made by the Municipality to properties which are liable for betterment contribution. This is clear from what the learned Judge observes

next:

A reading of Ex. B-6, which is an application made by the Municipal Council is the present case in form 20.....would clearly show that so far as

the question of the properties having increased in value or their being likely to increase in value by the making of a scheme is concerned, the

decision has already been made by the Municipal Council itself without reference to any other authority and thereupon the Council declares or

claims that it is entitled under clause 22 of the scheme to recover the betterment contribution from the owners of the properties according to the

terms and conditions laid down in the provisions of the scheme..... this application does not call upon the arbitrator to decide on the question of the

value having increased or not, but it takes it for granted that the value has increased.

In coming to the above conclusions, the learned Judge relied upon the wording contained in form 20, where under the Municipality, in putting

forward the claim, states:

I hereby request that you will be pleased under S. 27 to declare the liability of these properties for betterment contribution and to determing the

market value of each property on the date of the notification referred to above.

If what the learned Judge meant to say was that in relation to the determination of the liability of the property for betterment contribution, the

arbitrator had no duty to perform that matter having been already decided by the municipal council and what all was left for the arbitrator to do

was to declare the liability as set out in the claim made by the municipal as set out in the claim made by the municipal council, we must differ from

that conclusion. There can be no doubt in fact that the municipality was only a claimant before the arbitrator. It claimed that the properties included

in the scheme had either increased in value or were likely to increase in value by the making of the scheme, and under S. 23 of the Act it made a

claim. How that claim has to be disposed of is found in Ss. 27, 28 and 29 of the Act. We must disagree with the view that under S. 27 the

arbitrator had no power to examine the claim but was merely authorised to accept the claim and declare the liability of the property. The vary fact

that it was only a claim by the municipality which could be objected to by the owner of the property, to whom notice had necessarily to be given

under the provisions of the Act, indicates that this claim had to be whether the property in respect of which the claim was made had either

increased in value or was likely to increase in value by the making of the scheme. That was not a matter which had been decided by the

Municipality. Nor does the Act contemplate the decision by the Municipality leaving nothing for the determination of the arbitrator.

(14) Proceeding further on the same lines, the learned Judge, after referring to the particular awards made by the arbitrator in the case before the

Bench, observed,

This award makes no reference to S. 23 of the Act for the simple reason that the arbitrator is not called upon to give any findings as to whether

the properties have actually increased in value or not, or whether the Municipal Council is entitled to recover betterment contribution only on its

proving that the value of the property belonging to the plaintiff and comprised in the scheme has increased or is likely to increase by reason of the

making of the scheme. The arbitrator presumably proceeds on the basis that it is not within his province on the basis that it is not with his province

to say whether the title of the Municipality to recover betterment contribution is well founded or otherwise, or whether it is based on the fact that

the value of the properties has increased or is likely to increase by reason of the making of the town planning scheme, but merely gives the value of

the property as on the date when the notification of the scheme was made under S. 10 or S. 12 of the Act, on the assumption that since the

properties are included in the scheme and since a claim in respect thereof has been made, they are liable and bound to pay'' betterment

contribution........ The question of the right of the municipality to recover betterment contribution on proof of the value of the property comprised in

the scheme having increased or is likely to increase by reason of the making of the scheme is, therefore, not one decided by the arbitrator but is

one about which the municipal council itself has some to a decision and on that basis proceeds to lay its claim before the arbitrator. To our mind, all

that the Arbitrator does under S. 27 of the Town Planning Act is not to decide the question that the value of the property has increased or is likely

to increase by reason of the making of the town planning scheme and that therefore the Municipal Council is entitled to levy betterment

contribution, but merely to say that since the properties are included in the town planning scheme they are liable to betterment contribution, leaving

it to the municipal council by implication to substantiate its right to recover such contribution by proving that the increase in value has been due to

the making of the scheme. The most important and real thing that the arbitrator is called upon to do under S. 27 of the Act appears to be to fix the

value to the property involved in the scheme as on the date of the notification of the scheme and to determine the properties, that is, the particular

items which are prima facie liable to betterment contribution by their being included in the scheme. To read anything over and above this from the

awards of the arbitrator given under S. 27(1)(d) of the Act and not under S. 23 would be wholly unwarranted and unjustifiable.........

It will be noticed that the last part of the above extract is more or less in tune with the argument advanced by Mr. Ranganatha Sastri that what the

arbitrator does is only to place a geographical limitation upon the properties affected by the scheme and nothing more. That argument has really

very little to commend it. Nor are we able to follow the line of reasoning which ignores the statutory duty cast upon the arbitrator by the words of

S. 27(1)(d), that is, to determine in reference to the claims made; for the learned Judge says that what the arbitrator does under S. 27 of the Act is

not to decide the question that the value of the property has increased or is likely to increase. The further observation of the learned Judge that the

awards were given under S. 27(1)(d) and not under S. 23 also appears, if we may say so with respect, erroneous and against the specific wording

of the section. The section itself calls upon the arbitrator to determine the properties which are liable to contribution under S. 23, which latter

section clearly specifies the condition where under any property would become so liable. Indeed, in the performance of the other part of his

functions under S. 27(1)(d), viz., the estimate and record the marked value of the properties at the date of the notification under S. 12, the

arbitrator is specifically directed to ignore any improvements contemplated by the scheme and to estimate the value of the property without

reference to such improvements. Taking the two together, the first part of S. 27(1)(d) makes it mandatory upon the arbitrator to decide whether

any property has increased or is likely to increase in value by the making of the scheme. The conclusion that has been arrived at to the contrary by

the learned judge as a result of his discussion which we have extracted above seems to derive no support whatsoever from any of the provisions of

the Act.

(15) In fairness to the learned Judges who rendered the decision under review we must observe that they were to a great extent swayed by the

undeniable fact that such betterment contributions are more often than not levied and collected notwithstanding that no improvement contemplated

in the scheme has been actually executed. Basheer Ahmed Sayeed J, observed that in the case before him the scheme had been prepared as early

as 1937 and finally sanctioned only in 1943.

Until the date of the suit which was in 1947, or even thereafter, none of the items of improvements or amenities provided in the scheme appear to

have been actually brought into existence. No funds appear to have been spent on this scheme by the Madurai Municipality. There is nothing

unusual in this for it is rarely that the municipalities could command the resources to put through the schemes they prepare and publish.

He also noticed that there was considerable ground for believing that the levy of the contribution for a long number of years would result in the

contingency of the total contribution even exceeding the actual market value of the property. But what appears to have impressed the Judge even

more was the circumstance that the subsequent annual valuations of the property on the basis of which the relevant contribution was levied and

demanded for that year was not the subject-matter of any adjudication by the arbitrator or any other authority.

While we are fully alive to the fact that the levy of contribution is made in the years subsequent to the notification under S. 14(5) of the Act and

after the arbitrator has made his award under S. 27(1)(d) of the Act, on the basis of the annual potential increase in the value of the properties in

the majority of cases, that is to say, long before any of the amenities contemplated in the scheme have actually been executed in pursuance of the

scheme by the municipality or the Corporation, we cannot ignore the circumstance that the statute does entitle the municipality or the Corporation

to make such a levy. We have earlier indicated that the making of a scheme is far different from putting a scheme into execution and indeed from

putting a scheme into execution and indeed the two expressions ""increase in value"" or ""are likely to increase in value"" fully support the inference that

even before the actual execution of the scheme, the properties are capable of a rise in value. The feature that the Corporation is enabled to collect

betterment contribution even without executing any part of the scheme seems to have oppressed the learned judges to a great extent. In so far as

that aspect of the matter is relevant to the present appeal, we shall return to it later.

(16) The result of the discussion earlier is that in so far as the determination of the question whether any property included in the scheme has

increased in value or is likely to increase in value is a matter undoubtedly entrusted by the statute to the arbitrator under S. 27. It is, therefore,

incorrect to say that there is no machinery provided by the statute for the ascertainment of this fact. With respect, we are unable to agree with the

proposition set out that no such machinery is designed and further that the arbitrator''s functions under S. 27(1)(d) of the Act are confined only to

his determination of the market value of the properties at the date of the notification under S. 12.

(17) Mr. Ranganatha Sastri has been at great pains to establish that while it may no doubt be true that the properties in question have appreciated

in value and have been so appreciating in value from year to year, such appreciation is not due to putting into effect any of the contemplated

amenities provided in the scheme but due to various other extraneous and even adventitious circumstances. Where the increase in value is

attributable to such features, Mr. Ranganatha Sastri claims, and, perhaps with justice, that no betterment contribution would be levied on the basis

of such increase in value. It is admitted that the properties are situate on the Mount Road and though they are included in the area of the town

planning scheme, he claims that the increase in the value is not due to the scheme. One is fully aware that during the post-war years, Immovable

properties have increased in value by leaps and bounds even in cases where they are not covered by any town planning scheme. It may not,

therefore, be untrue to say that factually these suit properties owe their increase in value, partly at least to factors unconnected with the scheme.

But we are reluctantly led to conclude that such a contention is not open to any party under the provisions of the Act.

(18) In fixing the quantum of betterment contribution under S. 24 of the Act the legislature in its wisdom has provided that when once it has been

decided by the arbitrator under S. 27 that a property included in the town planning scheme is likely to increase in value by the marking of the

scheme, the subsequent estimated market value at the commencement of each financial year shall be taken as the basis for determining the quantum

of the levy, that is to say, on the difference between the market value recorded by the arbitrator at the date of the notification under Sec. 12 and

the value of the property at the commencement of any succeeding financial year, the betterment contribution according to the percentages fixed in

the scheme shall be levied. The underlying implication of the provision in this regard found in section 24 is that any increase in value subsequent to

the making of the scheme is attributable to the scheme and on that basis the levy of betterment contribution is provided. There is to our minds what

amounts to a statutory declaration that such an increase is due to the making of a scheme and that being so provided by the legislature, it seems to

us that it is not open to a party to claim that any part of the increase is attributable to reasons other than the making of the scheme. If any citizen is

aggrieved with such a statutory declaration, unless he could attack it on constitutional grounds, his remedy does not lie in the courts but elsewhere.

(19) The real question that arose for determination in Madura Municipality Vs. P.M.S. Muthusami Chettiar, , and that arises here, is with regard to

the annual valuation made by the Corporation in accordance with S. 24 for the levy of the betterment contribution. As we pointed out earlier, in so

far as such annual valuation is concerned, the arbitrator has no part to play and the rights of any citizen aggrieved by such determination are

provided for by S. 25(2)(a) whereunder betterment contribution has been placed in the same position as property tax and the citizen has been

given a right to receive notice, the right to object to the assessment and to appeal as he has in respect of assessments to property tax. It is also laid

down therein that the decisions on appeal in such cases would to the same extent as in respect of property tax be final and conclusive. There is

then a clear distinction between the functions of the arbitrator under S. 27 of the Act and the subsequent assessment, levy and demand of

betterment contribution by the Corporation and the municipal council. The arbitrator having decided the liability of the properties to betterment

contribution, on the basis of his decision that the properties have increased or are likely to increase by the making of the scheme, the statute has left

the further determination of the quantum to the municipal or Corporation authorities in the same manner as they make valuations of properties and

assessments of property tax. In so far as the latter is concerned, any aggrieved party has all the rights and remedies open to him in challenging the

levy of betterment contribution as he has in challenging assessments to property tax.

It was not argued before us that there is no machinery provided for the citizen to ventilate his grievances in that regard or that the civil court would

have jurisdiction on the ground that there is no machinery provided in relation to property tax. When once the liability of the property to betterment

tax has been decided by the arbitrator and the statute leaves the subsequent actual valuation of the properties to the Corporation or the municipal

authorities, to be dealt with in the same manner as property tax assessments which they are entitled to make with the usual rights such as revision

and appeal to the party aggrieved, it is difficult to conceive how in laying down principles for the determination of these questions the statute has

failed to provide the machinery.

(20) In the view that we have taken of the relevant provisions of the Act and the conclusion that we have reached, it is hardly necessary for us to

consider the wealth of authority that has been examined by the learned Judges in Madura Municipality Vs. P.M.S. Muthusami Chettiar, for

supporting the proposition that the jurisdiction of the civil court to decide a question is not ousted where there is no machinery provided for the

determination of any such question in any relevant statute. We have found that the statute does provide the requisite machinery. We have seen that

the statute provides also for an appeal form the decision of the arbitrator and states in express terms that subject to such appeal, the decision of the

arbitrator shall be final and binding on all persons. The questions then is whether these features are sufficient to indicate unmistakably the ouster of

the jurisdiction of the civil court with regard to the determination of such questions.

(21) It would suffice to refer to a few general principles in answer to this question. It is perhaps a trite maxim to say that an ouster of the

jurisdiction of the civil court cannot be lightly inferred. Unless the legislature gives a clear expression of its intention to d so, the general presumption

that established courts of law have jurisdiction will prevail. But there exists a class of cases where an inference of this kind can and must be made.

It would be sufficient to refer to a passage in Maxwell on Interpretation of Statutes, 10th Edn. At page 129:

The matter is summarised by Willes J. In Wolverhampton New Water Works Co. V. Hawkesford, (1859) 6 C.B.336, ''There are three classes

of cases in which a liability may be established founded upon a statute. One is where there was a liability existing at common law, and that liability

is affirmed by a statute which gives a special and peculiar form of remedy different from the remedy which existed at common law; there, unless the

statute contains words which expressly or by necessary implication exclude the common law remedy, the party suing has his election to pursue

either that or the statutory remedy. The second class to case is where the statute gives the right to sue merely, but provides no particular form of

remedy; there the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is

created by a statute which at the same time gives a special and particular remedy for enforcing it...... The remedy provided by the statute must be

followed, and it is not competent to the party to pursue the course applicable to cases of the second class.""''

It seems that the above passage fully and completely sets out the various categories of cases in which the jurisdiction of the civil courts is or is not

affected by the statute in question. In the present case, we have found that for the determination of the particular question, the statute has in fact

provided a remedy. At the earlier stage where the increase in value or the likelihood of increase in value is made subject-matter of a claim, the Act

provides for the appointment of an arbitrator, with special jurisdiction for the determination of that question. It goes further and states that subject

to certain contingencies, the decision of the arbitrator is final. It must necessarily follow that the normal forum of action for an aggrieved person in

such cases is, by the terms of the statute, denied to the party. The creation of a special forum for the enforcement of the rights and obligations of

contending parties in respect of a right or invasion of a right, for the first time created by the statute, does, to our minds, have the effect of denying

to the civil court any jurisdiction in that mater. We have already pointed out that with regard to the subsequent valuation, there is in effect a

statutory declaration that any increase in value is, in the eye of the statute, in question, the result of the making of the scheme. In the face of such a

provision, it is not open to a party to claim that such an increase in value is due to circumstances other than the making of a scheme. We have also

pointed out that in so far as the subsequent valuations are concerned, they have been brought into line with the assessments of property tax and the

special forms created in the relevant statute for the determination of questions and adjudication of disputes arising therefrom has also the effect of

ousting the jurisdiction of the civil court in that connection.

(22) In the result, we hold that Madura Municipality Vs. P.M.S. Muthusami Chettiar, was wrongly decided and overrule it. The appeal fails and it

dismissed with costs.

(23) Appeal dismissed.