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Judgment
Raju, J.—This writ petition has been filed seeking for a writ of certiorari to call for and quash the proceedings of the first respondent dated
May 14, 1977, and that of the second respondent Tribunal dated January 7, 1982.
The order of the first respondent is one made under the provisions of section 11 read with sections 5C and 40A of the Tamil Nadu Urban Land
Tax Act, 1966 (hereinafter referred to as ""the Act""), whereunder the first respondent assessed the writ petitioner who is the official liquidator of
Gannon Dunkerley and Co. (Madras) Ltd. to a tax of Rs. 47,112.50 for each Fasli commencing from Fasli 1385, in respect of urban lands
measuring about 276.0662 sq. ft. and 80,170 sq. ft. in T. S. Nos. 34 and 3756/1 of block 74 of Sembiam and Mylapore villages, which stand
registered in the name of the said Gannon Dunkerley and Co. (Madras) Ltd., which is at present under liquidation. Aggrieved against the said
order of assessment, the writ petitioner has preferred an appeal before the second respondent-Tribunal and, by an order dated dated January 7,
1982, the second respondent-Tribunal confirmed the order of the first respondent and rejected the appeal. Thereupon, this writ petition has been
filed.
Mr. M. S. Sundararajan, learned counsel for the petitioner, raised the following contentions before me at the time of hearing of the writ petition.
(1) The company in question is under liquidation and is in the custody of the official liquidator. Such a company under liquidation has no juristic
personality and, after the orders of winding up, the company cannot be considered to be the owner of the lands and, consequently, the assessment
of the properties of the company in the hands of the liquidator is without the authority of law;
(2) The assets of the company under liquidation belong to the entirety of the shareholders and contributories and even assuming without admitting
that the properties in question can be the assets of the company, under the Act, there cannot be a single assessment as though the properties still
belong to the company and, if at all, the liability has to be determined only with reference to the number of persons who are entitled to the assets of
the company. According to learned counsel, the proceedings are vitiated in this regard also.
(3) The provisions of section 2(10) of the Act, which defines ''owner'' do not refer specifically to a ''company under liquidation'' and, consequently,
the petitioner cannot be subjected to the levy under the Act;
(4) The properties in question are also the subject-matter of proceedings under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978,
and, if the lands are ultimately to vest with the Government, there is no justification to saddle the company with the liability for tax under the Act in
respect of the very same properties; and
(5) Regarding the market value fixed, the authorities have not taken into account the offer made by the Government to take the properties at the
rate of Rs. 6,000 per ground. According to learned counsel of the petitioner, the value now arrived at cannot be sustained in the light of the said
offer, made by the Government itself.
Mr. R. Lokapriya, the learned Government advocate, while refuting the contentions raised by learned counsel for the petitioner, submits that the
company under liquidation is also liable to tax under the Act in respect of its properties, that the definition of the word ""owner"" as contained in
section 2(10) of the Act is wide enough to include and take within its fold even a company under liquidation, though not specifically referred to,
that till the properties are actually distributed and ownership disrupted, it is up to the Department to make a single assessment treating the
properties as belonging to the company and that, at any rate, till the properties are acquired under the Tamil Nadu Urban (Ceiling and Regulation)
Act and vested with the State Government, the liability to tax under the Act in question is not obliterated.
After a careful consideration of the above submissions of learned counsel on either side, I am not inclined to accept any of the submissions made
on behalf of the writ petitioner. Though the submission that a company under liquidation cannot be assessed to tax under the Act has not been
raised in that form before the authorities below, having regard to the nature of the issue raised, I do not consider it necessary to reject it on that
ground alone, Learned counsel for the petitioner, in respect of his first point, placed reliance upon the decision of this court in Authorised Officer,
Land Reforms Vs. A.G. Dhamodaraswami Naidu (died) and Others, wherein Ramaprasada Rao. J. (as he then was), in respect of a question
arising under the Tamil Nadu Land Reforms (Fixation of Celling on Land) Act 1961, held that, under the Companies Act, no shareholder can say
what extent of interest he has in the assets of the company and the shareholding cannot be the foundation for evaluating such an interest in the
company itself. While coming to such a conclusion and considering the decision of the Supreme Court in Bacha Guzdar v. CIT [1955] 25 Comp
Cas 1; [1955] 1 MLJ 27; the learned judge expressed the view that there is no assumption that a shareholder who buys shares buys any interest in
the property of the company and that the true position of a shareholder is that, on buying shares, he becomes entitled to participate in the profits of
the company in which he holds the shares, as and when such dividends were declared, and his right to participate in the assets of the company
would arise only after the company is wound up. Relying upon the said observation, learned counsel for the petitioner sought to substantiate the
proposition that once there has been winding up, the shareholders will becomes joint owners of the properties and the properties of the company
which were under liquidation can no longer be said to belong to the company. I am afraid that neither on the basis of the judgment of this court nor
of the Supreme Court, could such a stand of learned counsel for the petitioner be countenanced.
In my view, the company under liquidation does not lose its existence. The effect of an order of winding up is to place the affairs of the company
into the hands of the official liquidator for completing the process of winding up, the official liquidator being put in possession as custodian legis and
managing the affairs for a limited purpose. In the course of administration by the liquidator, after meeting the liabilities of the company, he moves
the court for appropriate orders to adjust the rights of contributories among themselves and distribute any assets among the persons entitled
thereto. Till such an order of the court for such distribution is obtained and the assets have been distributed, actually the properties continues to be
those of the company. The company under liquidation continues to exist as a juristic personality until an order u/s 431 of the Companies Act
dissolving the company is made by the Competent Court. It is only thereafter that the company can be said to become non-existent in the eye of
law. Consequently, the submission of learned counsel for the petitioner in this regard fails and the petitioner cannot wriggle out of its liability under
the Act in respect of the properties in question.
So far as the provisions of section 2(10) of the Act are concerned, it defines ""owner"", for the purpose of the Act, in the following terms;
''owner'' includes -
(i) any person (including a mortgagee in possession) for the time being receiving or entitled to receive, whether on his own account or as agent,
trustee, guardian, manager or receiver for another person or for any religious or charitable purposes, the rent or profits of the urban land or of the
building constructed on the urban land in respect of which the word is used;
(ii) any person who is entitled to the kudiwaram in respect of any inam land;
but does not include -
(a) a shrotriemdar; or
(b) any person who is entitled to the melwaram in respect of any inam land but in respect of which land any other person is entitled to the
kudiwaram;
Explanation. - For the purposes of clause (9) and clause (10), inam land includes Lakhiraj tenures of land and shrotriem land.
In the absence of any specific definition in a particular Act of what ""any person"" means, resort also can be had to the provisions of the Tamil
Nadu General Clauses Act, 1891, which defines, in section 3(22), a person to mean and include any company or association of individuals,
whether incorporated or not. That apart, the definition is an inclusive one and found in a taxing enactment and the inclusive language adopted, in my
view, will take within its fold a company, whether under liquidation or prior to its liquidation. The fact that a company under liquidation does not
take itself out of the definition contained in section 2(10) of the Act is made clear by the comprehensive and widely inclusive nature of the definition
of ""owner"" and, consequently, this submission of learned counsel for the petitioner also fails and is rejected.
Having regard to the conclusions arrived at as against contention No. 1 that till an order of dissolution is made by the court, the juristic
personality of the company is not lost, the submission that the properties cannot be treated as a single unit of the company under liquidation merits
no consideration. This point also fails and is rejected.
So far as the plea raised, based on the Tamil Nadu Urban Land (Ceiling and Regulation) Act is concerned, it merits no serious consideration,
since till such time as a notification u/s 11(3) of the Act is issued and published in the Tamil Nadu Government Gazette, no divesting of the title of
the company in the properties takes place and the right, title and interest do not vest in the Government and till such time, the liability of the
company under the Tamil Nadu Urban Land Tax Act in respect of the tax due therein subsists and continues. As referred to by the learned
Government advocate, u/s 17 of the Act, the urban land tax due under the Act shall be the first charge on the urban land and, consequently, the
said submission also fails and is rejected.
As regards the next submission relating to the market value, the authorities below had specifically adverted to the same and assigned their own
reasons to reject the case of the petitioner which, in my opinion, cannot be said to be either perverse or totally lacking any basis. So far as the offer
of the Government to take the properties at Rs. 6,000 per ground is concerned, the appellate authority specifically had dealt with the issue and
rightly rejected it as not constituting a basis to fix the valuation at that rate. In the view of the Tribunal, the writ petitioner has not chosen to produce
the final orders to show what was the actual market value fixed by the Collector and whether the lands were actually acquired. The mere offer
contained in the letter cannot be sufficient in law to foreclose the right of the statutory authority exercising quasi-judicial powers under a taxing
enactment to fix the market value of the property in accordance with the powers conferred under the taxing enactment. There could be no legal or
valid objection also to the reasons assigned by the Tribunal for refusing to act upon the valuation, in exhibit A-3 which is only in the nature of a
suggestion or offer. Exercising jurisdiction under article 226 of the Constitution of India, I am not inclined to interfere with the factual findings of the
authorities below, particularly when the petitioner has not chosen to substantiate his valuation by any or sufficient material to the satisfaction of the
competent authorities under the Act. The fixation of the value by the authorities below cannot be said to be either arbitrary or perverse.
For all the reasons stated above, this writ petition fails and is dismissed. But, in the circumstances, there will be no order as to costs.