Municipal Corporation of Delhi vs Rajendra Cabinet House

Indermeet Kaur, J.—This appeal has been directed against the impugned judgment and decree dated 20.4.2002 which has endorsed the finding of the trial judge whereby the suit of the plaintiff Rajendra Cabinet House had been decreed .

The plaintiff Rajendra Cabinet House had filed a suit for permanent injunction; he has challenged the demand notice issued by the Respondent corporation for year ending 31.3.1981 which was for a sum of Rs. 20606.07. His contention was that the enhancement of the rateable value of the property was done illegally. It continues to be Rs. 540/-. It was contended that the plaintiff had not been served with the mandatory notice u/s 124/126 of the Delhi Municipal Corporation Act (hereinafter referred to as ''DMC Act''). The rateable value could be enhanced only after service of the said notice. Violation of principles laid down by the Supreme Court in this regard

The Defendant had contested the suit. It was stated that the rateable value was rightly enhanced.

Trial judge had framed the following issues:

Whether the deft, MCD has legally enhanced the rateable value of Rs. 24110/- w.e.f. 1.4.78? If so, to what effect? OPD

Whether the suit''s not maintainable in view of the preliminary objections raised in the written statement? OPD

Relief.

In view of the oral and documentary evidence which included the sole testimony of the Defendant himself, trial judge held that the plaintiff is entitled to a decree of injunction as mandate of Section 126 of the DMC Act i.e. the service of notice on the plaintiff has not been substantiated; in the absence of which the rateable value could not have been enhanced.

The impugned judgment has endorsed this finding.

This is a second appeal. On 17.5.2007, the following substantial question of law has been formulated, which inter alia reads as under:

Whether objections taken by the Appellant and also in view of Section 169 of DMC Act, 1957, the suit for permanent injunction filed by the Respondent was maintainable?

The relevant extract qua this issue in the impugned judgment reads as follows:

Ld. Counsel for the Respondent has contended that the jurisdiction of the civil court is barred u/s 169 of DMC Act, therefore, the suit before the Sub-judge was not maintainable. The aforesaid section is reproduced as below:

The appeal against the levy or assessment of any tax under this Act shall lie to the court of District Judge of Delhi.

The above provision provides that an appeal against the assessment of any tax under the DMC Act shall lie to the court of District Judge, Delhi. The District Court upon an appeal can confirm, set aside, or modify the order in respect of any liability to assessment. It is the provision which bars a civil suit by implication, although, there is no express bar. Ld. Counsel for the Respondent is relied upon Dhulabhai and Others Vs. The State of Madhya Pradesh and Another, in which it was held inter alia that where a statute gives finality to the order of special tribunal, civil courts jurisdiction must be held to be excluded, if there is adequate remedy to civil court would normally do it in a suit.

Thus, the correctness of an assessment is for the decision of the authorities and civil suit does not lie if the order of authorities are decaled to be final. But in the instant case, the position is different. According to Section 169 of DMC Act, an appeal can lie against the levy or assessment of any tax but it has to be seen as to whether the levy of assessment of tax is after affording an opportunity or following procedure provided under the DMC Act or not? In the instant case the Respondent has challenged that he has not been served with the show cause notice allegedly issued by the Appellant. In this reference, the case of K.L. Rathee Vs. Municipal Corporation of Delhi, is relevant and the extract is reproduced as below:

According to the command of Sub-Section 3 of Section 126 of DMC act, notice could have been given within the period of limitation prescribed therein. The service of a valid notice by 1st April 1992 being a condition precedent to the exercise of jurisdiction by the Respondent, no fresh notice after that day can be given.

In the instant case, from perusal of the statement of DW-1, it appears that notice Ex.DW1/2 was issued under his signatures. It was not served by him to the Respondent nor any witness appeared to prove that the said notice was served upon the Respondent. Under such circumstances, it is evident that the Respondent has not been served with the said show cause notice. It means that without service of such notice, the assessing authority levied or assessed the tax without affording any reasonable opportunity to the Respondent. In this manner such levy or assessment of tax shall not fall within the provisions of Section 169 of DMC Act which bars the jurisdiction of civil court. In this respect, recent judgment announced by our own High Court in Ganga Ram Hospital Trust v. Municipal Corporation of Delhi in RFA No. 163 of 1997 is relevant and the extract is reproduced as below:

A civil suit was maintainable where it could be shown that the impugned action was in violation of the statute or outside the purview of jurisdiction of the authority.

After following the above case law and the procedure established by the corporation in this case, it is explicitly clear that the assessment made by the corporation is without jurisdiction and does not cover the provisions of Section 169 of DMC Act with the result that civil courts have jurisdiction in this matter.

The oral and documentary evidence had been examined in the impugned judgment. Statement of DW1 was adverted to; it was held that the Defendant had failed to prove that the notice Ex.DW1/2 had been served upon the plaintiff; no reasonable opportunity of hearing was granted to the plaintiff before the enhancement of the rateable value. Relief was granted to the plaintiff and rightly so. On the objection about the jurisdiction of the civil court it was held that Section 169 of the DMC is not attracted as it no doubt provides that the appeal against the levy or assessment of any tax will lie to the District Judge, yet in this case this levy or assessment was without giving any opportunity of hearing to the plaintiff which was a condition precedent before the tax could be imposed upon the plaintiff.

The impugned judgment suffers from no infirmity. The arguments addressed before this Court on both the aforenoted counts only have been dealt with in the impugned judgment in a fair fashion and calls for no interference. Reliance by the counsel for the Appellant upon a judgment of the Supreme Court reported in Dhulabhai (supra) to support her submission that the order of the assessing authority is a final order which could not have been assailed by way of filing the present suit is misplaced. These were suits filed by the Appellant against the Defendants restraining them from recovery of sales tax. While culling out the rules applicable to such like proceedings the Supreme Court had clearly held that when a statute gives a finality to the order of the said tribunal, the civil court jurisdiction must be held to be excluded. In this case, the order of the Tribunal/assessment authority had not attained a finality; in the absence of mandatory provision of Section 126 of the DMC Act not having been complied the rateable value could not have been enhanced; there was no finality to the order of the Assessing Authority. Ratio of this judgment would not apply.

The substantial question of law is answered accordingly. Appeal is dismissed being without any merit.