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Judgment
Veeraswami, J.—By an indenture of lease dated 3rd April, 1954, between the Managing Receivers of the estate of late Haji Sir Ismail Sait
and the petitioners, a company registered as such under the pro visions of the Indian Companies Act, the latter took on lease the premises bearing
Municipal Door No. 1/2 First Line, Royapuram Beach Road, Madras under certain terms and conditions. One of such conditions was that the
lessees should themselves pay all the taxes, other than the property tax, in respect of the business that they may carry on in the demised property,
and the lessors should pay the property tax that was existing then and all future taxes, rates, assessments, levied by way of property tax and quit
rent. Another stipulation in the lease deed ran:
On the expiration of the lease period or sooner determination thereof, the lessees shall deliver up to the lessors the demised property together with
all the buildings that have been erected by the lessees excluding only the plant, -machinery, accessories, spares etc., be they attached to earth or
not which the lessees shall be at liberty to remove.
The lessors agreed that the lessees would be permitted to demolish all or any of the existing buildings as the lessees deem fit and necessary for
the purposes of carrying on their business for erecting a flour mill industry, plant, godown, quarters etc., and running the same. It is common ground
that in exercise of this privilege, the petitioners demolished the structures existing at the date of the lease and constructed at a cost of about Rs.
6,00,000, a five storied flour mill building, besides a three storied office building. On 30th August, 1960 the Corporation of Madras served on the
petitioners six notices covering the periods of the second half years 1957-58 to the first half year 1960-61, Intimating that the annual value of the
buildings had been fixed at Rs. 21,600 and that the petitioners would be given a reasonable opportunity to appear to show cause against the
revised assessment on the basis of such annual value fixed. This petition is for a writ of mandamus directing the Corporation of Madras or its
officers or servants to desist from collecting the sum of Rs. 18,314-10 nP. demanded in their notice dated 18th March, 1961, as property tax in
respect of the said premises for the half years commencing with the second half year 1957-58 to the second half year 1960-61. Their case is that
under the terms of the lease, the liability to pay property tax was entirely on the lessors even in respect of buildings constructed by the petitioners
under the liberty clause reserved in the lease. On the other hand, the Corporation states that under S. 100 of the City Municipal Act, the buildings
alone could be assessed separately if the owner there of is different from the owner of the site or premises on which the buildings stand. The
question, therefore, is whether the buildings in question, admittedly constructed by the lessees, are owned under the terms of the lease by the
lessor. What is contended for the petitioners is that in view of the term in the lease, that on the expiration of the lease period or sooner
determination thereof, the lessees should deliver up to the lessors the demised property together with all the buildings that have been erected by the
lessees excluding only the plant, machinery, accessories, spares, etc., the lessors became the owners of the buildings in question, and, therefore the
assessment in respect thereof, as if they belonged to the lessees, cannot be sustained, A further contention of the petitioners is that since the lease
threw the liability on the lessors to pay the property tax both existing and future, this liability should be deemed to cover the property tax in respect
of the buildings in question as well.
As to the first contention, it seems to proceed upon a misapprehension that the moment the buildings were put upon the site of the lessors, they
stood automatically transferred to or became the property of the lessors. This, however, is not the law in this country. The English principle of
spick quid plantator solo, solo cedit, which is well established, is not applicable to this Country Under the common law of this country as decided
as early as 1866 in Paramanick''s Case (1), the rule is that if a per-son who makes the improvement, is not a mere trespasser, but is in possession
under any bona fide title or claim of title, he is entitled either to remove the materials, restoring the land to the state in which it was before the
improvement was made, or to obtain compensation for the value of the building if it if allowed to remain for the benefit of the owner of the soil-the
option Of taking the building, or allowing the removal of the material, remaining with the owner of the land, in those cases in which, the building is
not taken down by the builder during the continuance of any estate he may possess. This principle has been followed and applied in numerous
cases"" which have arisen in this country, The principle of the common law of India is also now embodied in S. 108 (h) which reads that the lessees
may, even after the determination of lease remove at any time, while he is in possession of the property leased but not towards, all things which he
has attached to the earth provided he leaves the property in the state in which he received it. The position, therefore, is that under the ordinary law
of this country a lessee the under a liberty reserved to him by the lessor, put up buildings is entitled to remove them at the time when he leaves the
premises on the expiration of the lease or even after the determination of the lease if he is in possession of the property leased. But if he does not
do so, he is not entitled to remove the buildings after those events. But, as stated in S. 108, this right is subject to a con-tract to the contrary. It is
open to the lessee to surrender his right by agreement.
Where therefore, there is stipulation in a lease that the lessee will leave intact such buildings as he might have put up as a lessee on the land
leased, that amounts to contract to the contrary. When he so leaves, it is obvious that there is no transfer of property in the buildings as such to the
lessor. The legal implication in such a case, as I think, is only that far from there being a transfer of property in the buildings, the owner of the site or
land takes those buildings as being part of the site or land. It may be remembered that even in England, in the principle pithily expressed the maxim
spick quid plantatur plantatur tor solo, solo cedit , there is no passing of property in order to vest in the owner of the land the ownership of the
property in the building, but, by reason of the fixture of plantatur what is affixed becomes part of the land and it goes along with the land to its
owner. In my opinion, therefore, the effect of this stipulation requiring the lessees to leave the buildings at the happening of either of the two events,
namely, expiration of the lease period or sooner determination under the terms of the lease is not to transfer the ownership of the buildings the
moment they were put up and make the lessors the owners there of. The liberty to enter into a con tract to the contrary contemplated by S. 108
does not pertain to transfer of ownership, but to surrendering the right reserved under Cl. (h) of that section, to remove the superstructure at the
specified events. I, therefore, reject the contention of the petitioners that the Corporation was not justified in treating the petitioners as the owners
of the buildings and making a separate assessment to property tax in respect thereof.
The other question is the construction to be placed upon the stipulation in the lease that the lessors covenanted expressly to pay the properly tax,
then existing, and future taxes and rates. In my view, this stipulation least helps the petition-era. There is nothing in this stipulation to justify the
construction that even in respect of buildings put up by the lessees, the lessors agreed to bear the liability and pay the property tax.
My attention, on behalf of the petitioners, was invited to Bhatia Co-operative Housing Society Ltd. Vs. D.C. Patel, . In that case a plot of land
belonging to the Board of Trustees for the Improvement of the City of Bombay was put to auction on certain terms and conditions for the purpose
of granting a building lease. A certain person was the highest bidder, and one of the terms of the conditions was that the highest bidder should build
and complete at his own cost a building of particular specification at a given value. Cl. 18 provided that after the completion of the building within
the time specified, the Trustees should grant to the highest bidder or his nominee a lease of the plot with buildings thereon for a term of 999 years
from the date of the auction at an yearly rent calculated in accordance with the accepted bidding for the plot. The question before the Supreme
Court was whether the lessee or his nominee was a person to whom the buildings belonged within the meaning of the Bombay Rents Hotel and
Lodging House Rates Control Act, 1947. The Supreme Court held that the fact that the lessee incurred expenses in putting up the building was
precisely the consideration for the lessor granting him a lease for 999 years not only of the building but of the land as well as what may be a cheap
rent, which the lessor might not have otherwise agreed to do, and that by the agreement, the building became part of the land and the property of
the lessor and the lessee took a lease on that footing. It may be seen that the question decided there was quite different from what arises here, and
that case has no application to the facts of this case on the question whether the lessor or the lessees are the owners of the buildings constructed by
the latter on the site leased. The petition fails and is dismissed with costs. Counsel''s fee Rs.100.