Upendranath Chatterji vs Pramathanath Majumdar

Das, J.—This is an appeal by the Plaintiff against a judgment and decree of Mr. N.C. Chakrabarti, Additional District Judge, Howrah, dismissing the Plaintiff''s suit for a declaration that the Plaintiff''s interest was, unaffected by a sale held at the instance of the Howrah Municipality against one Batakrishna Ray Chaudhuri.

The Plaintiff''s case is that the disputed holding belonged to one Rajkishore Ray Chaudhuri. On Rajkishore''s death it devolved on his two sons, Ramchandra and Girish. Ramchandra''s eight annas share was purchased by the Plaintiff''s father in 19166 in execution of a mortgage decree. Girish''s eight annas share devolved ultimately on Batakrishna as regards four annas share, and on Prabhabati as regards the remaining four annas. It appears that, in the municipal assessment books, the name of Batakrishna was recorded as the owner and one Behari Maiti was recorded as the occupier of the disputed premises. In 1934, Batakrishna sold his undivided four annas share to the Plaintiff''s father. In 1941, Prabhabati sold her undivided four annas share to one Nilratan Chaudhuri. In 1943, Nilratan Chaudhuri started a partition suit-against his co-sharers. The partition suit was decreed and the disputed property was allotted solely to the Plaintiff. On June 2, 1941, the Howrah Municipality instituted a suit against Batakrishna Ray Chaudhuri alone, claiming rates and taxes for the period 1933-34 to 1940-41. In the suit, the Plaintiff, Howrah Municipality, prayed for a charge decree u/s 205 of the Calcutta Municipal Act, which had been extended by notification to Howrah. The suit ended in an ex parts decree. In execution of the said decree, the disputed property was brought to sale and purchased by Defendant No. 1. Thereafter, Defendant No. 1 took symbolical possession, The Plaintiff filed the present suit on July 30, 1946, for a declaration that his interest in the disputed property was unaffected by the sale at which the Defendant No. 1 purchased.

The defence to the suit was that the suit by the Municipality was one for a declaration of charge and that, as it was instituted against the recorded owner, the property itself passed to the purchaser, Defendant No. 1.

The trial court overruled the defence and decreed the Plaintiff''s suit. Defendant No. 1 preferred an appeal to the court of the District Judge. The appeal was heard by the Additional District Judge, who reversed the decree of the trial court and dismissed the Plaintiff''s suit. The Plaintiff has, accordingly, preferred this appeal.

Mr. Chakravarti, appearing on behalf of the Plaintiff-Appellant, has contended that the decree in the charge suit brought by the Municipality and the sale in execution of that decree did not affect the interest of the Plaintiff who was no party to the decree, the suit having been prosecuted only against the recorded owner Batakrishna, who had no interest at the time.

In order to decide this contention it is necessary to refer to the material portion of Section 205 of the Calcutta Municipal Act which runs as follows:

The consolidated rate due from any person in respect of any land or building shall * * * be a first charge upon the said land or building and upon the movable property (if any) found within or upon such land or building and belonging to the said person.

Section 205 merely declares the liability of the land and building in case, of non-payment of rates and taxes. It imposes a liability in rem, but it does not provide for the procedure which has to be followed to enforce such liability. The liability thus imposed must be enforced by a suit. As the suit is one for enforcing a charge of the Municipality, the provisions of Order XXXIV, Rule 15 of the Code of Civil Procedure, would apply. As such, the procedure prescribed for the enforcement of a mortgage as contained in Order XXXIV, Rule 1 of the Code of Civil Procedure, would be attracted. In other words, persons interested in the mortgage security or in the equity of redemption should be made parties to the suit. As the charge created by Section 205 is a statutory charge, the effect thereof is not to vest any interest in the charges. The owner of the premises remains the owner in spite of the charge and in order that the charge may be successfully worked out the owner of the property should be impleaded as a party to the suit. In the present case, at the material date when the charge was sought to be enforced, Batakrishna, the Defendant in the charge suit, had no interest whatsoever in the property. The decree obtained in the charge suit and the sale held in execution thereof did not affect the interest of the persons interested in the property. The sale, at which Defendant No. 1 purchased, therefore, did not pass any title of Defendant No. 1 to the disputed property. Digambar Suthar v. Suajan (1928) 33 C.W.N. 100. It has been contended, however, that, as the decree was obtained against the recorded owner, the suit was properly instituted and the decree against the recorded owner would bind the holding itself. The question would depend on the provisions of the Calcutta Municipal Act. The Additional District Judge referred to Sections 124, 145, 146, 149, 157, 162, 163, 204 and 205 of the Calcutta Municipal Act and observed that the effect of these sections is that the municipality can obtain a decree for a charge against the recorded owner only and sell the holding itself in execution of a decree obtained against the recorded owner and the sale would have the effect of passing a title of the property in the auction purchaser. Mr. Janah Appearing for Respondent No. 1 has also referred us to Section 212 of the Calcutta Municipal Act. I shall, therefore, refer to the sections relied on by the learned Additional District Judge and by Mr. Janah in support of the submission. I shall also refer to Certain other sections of the Calcutta Municipal Act which may have a bearing on this question.

Section 3(5) of the Calcutta Municipal Act defines the word "owner" as including a person for the time being receiving the rent of any land or building or any part thereof. Section 3(48) defines the word, "occupier" as including a person for the time being paying, or liable to pay rent to the owner. Part III of the Act deals with taxation. Chapter X, Pt. III deals with imposition of the consolidated rate. Section 124 empowers the Corporation to impose consolidated rate upon all lands and buildings within the municipality and lays down rules for fixing the annual value. Section 136 empowers the Executive Officer to require the owners and occupiers to submit returns for the purposes of valuing the premises. Section 138 provides for the service of a notice in case of new valuation or increase in valuation. Sections 139 to 141 provide for remedies for correcting the valuation made by the Corporation. Section 139 refers, to any person who is dissatisfied with the valuation, as being competent to dispute the amount of valuation fixed by the Corporation. Section 143 speaks of the maintenance of assessment books by the municipality. Sub-section (1), Clause (c) of Section 143 requires the name of the owner or occupier to be entered in the assessment books. Section 143(3) states that this column may be left blank where the name of the owner and occupier is unknown. Section 144 provides that any owner or occupier whose name has not been entered in the assessment books may apply to have his name recorded. Section 144(2) empowers the Executive Officer to decide any dispute where there are gradations of owners and occupiers and to incorporate the name of the person who the Executive Officer thinks should be recorded as owner and occupier. Section 144(3) lays down that an unrecorded owner or occupier is not entitled to object that the bill or notice of demand or warrant or other notice of any kind required by the Act to be served on the owner or occupier, has not been made out in his name. The Sub-section states the effect of non-inclusion of the name of the real owner and occupier in the assessment books. This Sub-section merely provides that the notices and the bills may be issued in the name of the recorded owner and occupier. This does not imply that the Corporation can ignore the claims of the owner or the occupier as the case may be. Section 145 requires the transferee or the heir or devisee of any land or building to give notice in writing of the succession or transfer to the Executive Officer. Section 146 confers on the Executive Officer the power to amend the assessment book in case of transfer or succession as the case may be. Section 148 states that the entry in the assessment book shall remain in force for the whole period for which the valuation has been made. Section 149 apportions the liability to pay any consolidated rates and taxes between the owner and occupier, each being made liable for one-half of the rates and taxes. Section 157 provides for certain cases where the entire rates and taxes may be realised from the owner. Section 159 provides that in cases of bustee land the owner shall be liable for the entire rates and taxes. Section 162 empowers the Executive Officer to require the occupier to furnish the name of the owner and Section 163 provides that on such failure the rate may be recovered from the occupier.

All the sections referred to above deal with the liability of the owner or the occupier. They do not say that only the recorded owner and occupier would be regarded by the Corporation as the persons liable to pay the rates and taxes.

Chapter 16 deals with the recovery of the consolidated rates and taxes. Section 188 lays down that the power of the Corporation, as contained in Ch. 16, is not in derogation of any other rights which the Corporation may enjoy in the matter of realisation of taxes. Section 189 requires the Corporation to present the bill "to the person liable". Section 190 then provides that if the bill is not paid by the person liable, notice of demand shall be given to such person in the form prescribed in the schedule. Section 191 empowers the Corporation to levy distress. Section 199 provides that, if the owner''s share of the taxes remains unpaid after notice of demand, the rates and taxes may be recovered from the occupier and the sub-tenants in certain, cases. Section 200 makes the purchaser liable for the vendor''s share of the rates and taxes for a period not exceeding one year prior to his purchase. Section 204 then provides that it shall be competent fox the Corporation to recover from him (defaulter) by suit, in any court of competent jurisdiction, any sum due on account of consolidated rate. I have already quoted Section 205 of the Act. Section 212 then provides that no assessment and no charge or demand of the consolidated rates or taxes shall be called in question on the ground of mistake in the name, address and occupation, etc. of any person liable to pay the same. Section 212(2) then says that it shall suffice to state the description of the property, but it shall not be necessary to name the owner or occupier.

It would seem, therefore, that the liability is imposed upon the person liable to pay the rates and taxes and not upon the recorded owner. The different sections of the Municipal Act proceed on the footing that the charges may be recovered from the owner and occupier, as the case may be, and there is nothing in the Act which empowers the Corporation to realise the same by proceeding against the recorded owner only. In the absence of such express provision in the Municipal Act, it would follow that the proper remedy of the Corporation is to proceed to enforce the charge in the ordinary way, namely, by framing the suit in terms of Order XXXIV, Rule 1 of the Code of Civil Procedure. In the present case, as I have already said, this procedure was not followed and the decree obtained against the recorded owner and the sale held in execution thereof did not affect the title of the real owner, viz., the Plaintiff.

Mr. Janah also contended that the Plaintiff was estopped from asserting his title to the disputed property on the ground that he allowed the name of Batakrishna to remain in the books of the Corporation for a long time. It would appear that the name of Batakrishna was recorded long before the Plaintiff''s purchase. There was no representation by the Plaintiff to the Corporation that Batakrishna was the real owner. Nor was the Plaintiff aware of the fact that the proceedings were being taken against Batakrishna. It does not appear that the Plaintiff by his conduct in not getting his name mutated induced the Corporation to proceed against the recorded owner only. The bills to which Mr. Janah referred were no doubt drawn up in the name of Batakrishna, but the payments must have been made by the Plaintiff or his predecessor-in-interest. The Corporation, therefore, must have known that the title of Batakrishna had ceased long before. In any event, it cannot be predicated in the facts of this case that the Plaintiff by his conduct misled the Corporation into suing Batakrishna for the rates and taxes. No question of estoppel can, therefore, arise on the facts of this case.

In the result, the contention raised on behalf of the Appellant succeeds. This appeal must accordingly be allowed, the judgment and decree of the lower appellate court set aside and that of the court of first instance restored with costs in this Court and in the lower appellate court.

Harries, C.J.

I agree.