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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 14.5.1977 and that of the second respondent-Tribunal dated 7.1.1982.
The order of the first respondent is one made under the provisions of Section 11 read with Section 5-C and 40-A of the Tamil Nadu Urban Land Tax Act, 1966 (hereinafter referred to as ''the Act''), where-under the first respondent assessed the writ petitioner, who is the Official Liquidator of Gannon M/s. Dunkerley & 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. feet and 80,170 sq. feet in T.S. Nos.34 and 3756/1 of Block 74 of Sembium and Mylapore villages, which stand registered in the name of the said M/s. Gannon Dunkerley & 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 7.1.1982, 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 with reference to the number of persons who are entitled to the assets of the Company. According to the learned Counsel, the proceedings are vitiated in this regard also.
(3) The provisions of Section 2(10) of the Act, which defines ''owner'' does not refer specifically to a ''company under liquidation'' and consequently, the petitioner cannot be subjected to 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 the learned Counsel for the petitioner, the value now arrived at cannot be sustained in the list of the said offer, made by the Government itself.
Mr. R. Lokapriya, learned Government Advocate while refuting the contentions raised by the 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 upto 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 for tax under the Act in question is not obliterated.
After a careful consideration of the above submissions of the 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. The 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 on Ceiling 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 share holding cannot be the foundation for evaluating such an interest in the company itself. While coming to such a conclusion and considering a decision of the Supreme Court reported in Mrs. Guzdar v. C.I.T. Bombay (1955) 1 M.L.J. 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 only arise after the company is wound up. Relying upon the said observation, the learned Counsel for the petitioner sought to substantiate the proposition that once there has been winding up, the shareholders will become the 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, such stand of the learned Counsel for the petitioner could 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 ''custodia legis'' and managing the affairs for the limited purpose. In the course of administration by the Liquidator, after meeting out 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 actually the assets have been distributed, the properties continue to be that of the Company. The Company under liquidation continues to exist as a juristic personality until an order u/s 481 of the Companies Act dissolving the Company is made by the competent Court. It is only thereafter the Company can said to become non-existent in the eye of law. Consequently, the submission of the 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 is 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 or of the building constructed on the urban land in respect of which the words 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 purpose of Clause (9) and Clause (1), 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 the company under liquidation does not take itself out of the definition contained in Section 2(10) of the Act is made clear by the all Comprehensive and widely inclusive native of the definition of owner and consequently, this submission of the 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 when 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 there in 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 for a sum of Rs. 6,000 per ground is concerned, the Appellate Authority specifically had dealt with the issue and rightly rejected it as not constituting the basis to fix the valuation at the 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 Ex. 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 staled above, this writ petition fails and is dismissed. But, in the circumstances, there will be no order as to costs.