South Delhi Municipal Corporation & Anr. vs M/s Today Homes and Infrastructure Pvt. Ltd. Etc. …. Respondent (s)

laid down in the judgment of the Division Bench.

Aggrieved thereby, the South Delhi Municipal Corporation

(hereinafter, ‘the SDMC’) has filed this appeal.

2. M/s GPS Properties Pvt. Ltd. was the highest bidder in

the auction of commercial plot Nos.4, 5 and 6 of Shivaji

Complex, District Centre, Raja Garden, New Delhi. Said

property was allotted by the Slum & J. J. Department of the

Municipal Corporation of Delhi in favour of M/s GPS Properties

Pvt. Ltd. Approval for construction of a mall/commercial

complex was granted by the Delhi Development Authority

(hereinafter, ‘the DDA’). M/s GPS Properties entered into a

development agreement with M/s Today Homes and

Infrastructure Pvt. Ltd. for construction of a

mall/commercial complex and for sale of units therein.

Occupancy certificate/completion certificate was granted

by the DDA vide its letter dated 25.07.2008. The property

was assessed for payment of taxes and a demand was

raised pursuant to the assessment order. The

Respondents approached the Municipal Taxation Tribunal

(hereinafter, ‘the Tribunal’) by filing an appeal under

Section 169 of the Delhi Municipal Corporation Act, 1957

2 (hereinafter ‘the Act’), which was later withdrawn.

Thereafter, a civil suit was filed in the High Court of Delhi

challenging the assessment order dated 01.03.2013 and

the warrants of attachment. The Appellant raised a

preliminary objection regarding the maintainability of the

suit which was accepted by the learned Single Judge, who

placed strong reliance on the judgment of this Court in

NDMC v. Satish Chand1 to hold that the civil suit was not

maintainable.

3. The approach of the learned Single Judge was

disapproved by the Division Bench. The Division Bench

held that the learned Single Judge overlooked the

distinction between an express bar of a civil suit and where

there is no express bar but the remedy provided is

onerous. The High Court further observed that the learned

Single Judge failed to take into account the relevant factors

to determine the maintainability of the civil suit.

According to the Division Bench, the learned Single Judge

had neither examined whether the remedy provided by the

Statute was onerous nor determined whether the limited

window for filing a civil suit, in spite of a bar, was available 1 (2003) 10 SCC 38

3 to the Respondents. The Division Bench remanded the

matter back for fresh consideration by the learned Single

Judge who was directed to examine the facts of the case in

the light of the observations made by the Division Bench

and the law laid down by this Court.

4. Whether a civil suit is maintainable in disputes

pertaining to payment of tax under the Delhi Municipal

Corporation Act, 1957 is the question that arises for our

consideration in these appeals.

5. Section 9 of the Code of Civil Procedure, 1908

(hereinafter ‘the CPC’) confers jurisdiction on the Civil

Courts to try all suits, excepting those which are either

expressly or impliedly barred. Chapter VIII of the Act deals

with levy of taxes that can be imposed by the Corporation.

Property tax is dealt with in Sections 114 to Section 135 of

the Act. Sections 169 to 171 which relate to appeals that

may be filed against orders of assessment are as follows:

169. Appeal against assessment, etc. (1) An appeal against the levy or assessment or revision of assessment of any tax under this Act shall lie to the Municipal Taxation Tribunal constituted under this Section:

4 Provided that the full amount of the property tax shall be paid before filing any appeal:

Provided further that the Municipal Taxation Tribunal may, with the approval of the District Judge of Delhi, also take up any case for which any appeal may be pending before the Court of such District Judge: Provided also that any appeal pending before the Court of such District Judge shall be transferred to the Municipal Taxation Tribunal for disposal, if requested by the applicant for the settlement thereof on the basis of annual value.

(2) (a) the Government shall constitute a Municipal Taxation Tribunal consisting of a Chairperson and such other members as the government may determine:

Provided that on the recommendation of the government, the Chairperson may constitute one or more separate Benches, each Bench comprising two members, one of whom shall be a member of the Higher Judicial Service of a State or a Union Territory and the other member from the Higher Administrative Service, and may transfer to any such Bench any appeal for disposal or may withdraw from any Bench any appeal before it is finally disposed of.

(b) The Chairperson, and not less than half of the other members, of the Municipal Taxation Tribunal shall be persons who are or have been the members of the Higher Judicial Service of a State or a Union Territory for a period of not less than five years, and the remaining members, if any, shall have such qualifications and experience as the Government may by rules determine.

(c) The Chairperson and the other members of the Municipal Taxation Tribunal shall be appointed by the

5 government for a period of five years or till they attain the age of 65 years, whichever is earlier.

(d) The other terms and conditions of service of the Chairperson and the other members of the Municipal Taxation Tribunal, including salaries and allowances, shall be such as may be determined by rules by the Government.

(e) The salaries and allowances of the Chairperson and the others members of the Municipal Taxation Tribunal shall be paid from the Municipal fund.

(3) In every appeal, the costs shall be in the discretion of the Municipal Taxation Tribunal or the Bench thereof, if any.

(4) Costs awarded under this section to the [a Corporation] shall be recoverable by the [a Corporation] as an arrear of tax due from the appellant. (5) If [a Corporation] fails to pay any costs awarded to an appellant within ten days from the date of the order for payment thereof, the Municipal Taxation Tribunal may order the Commissioner to pay the costs to the appellant.

170. Conditions of right to appeal.

No appeal shall be heard or determined under section 169 unless—

(a) the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication of the assessment list under section 124 (exclusive of the time requisite for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days of the date on which an amendment is finally made

6 under section 126, and, in the case of any other tax, within thirty days next after the date of the receipt of the notice of assessment or of alteration of assessment or, if no notice has been given, within thirty days after the date of the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof:

Provided that an appeal may be admitted after the expiration of the period prescribed therefor by this section if the appellant satisfies the (Municipal Taxation Tribunal) that he had sufficient cause for not preferring the appeal within that period;

(b) The amount, if any, in dispute in the appeal has been deposited by the appellant in the office of [a Corporation].

171. Finality of appellate orders.

The order of the [Municipal Taxation Tribunal] confirming, setting aside or modifying an order in respect of any rateable value or assessment or liability to assessment or taxation shall be final:

Provided that it shall be lawful for the [Municipal Taxation Tribunal], upon application or on its own motion, to review any order passed by it in appeal within three months from the date of the order.

6. There is an inherent right to approach a civil court.

The bar on a civil court’s jurisdiction is not to be readily or

7 lightly inferred. The jurisdiction of civil courts can be

excluded by an express provision of law or a clear

intendment in such law. Wolverhampton New

Waterworks Co. v. Hawkesford2 resolved the dispute

pertaining to the bar on jurisdiction of civil courts, in the

following manner:

"One is where there was a liability existing at common law, and that liability is affirmed by a Statute which gives a special and peculiar form of remedy different from the remedy which existed at common law: there, unless the Statute contains words which expressly or by necessary implication exclude the common law remedy the party suing has his election to pursue either that or the statutory remedy. The second class of cases is, where the Statute gives the right to sue merely, but provides, no particular form of remedy: there, the party can only proceed by action at common law. But there is a third class, viz., where a liability not existing at common law is created by a Statute which at the same time gives a special and particular remedy for enforcing it........ The remedy provided by the Statute must be followed and it is not competent to the party to pursue the course applicable to cases of the second class."

2 [1859] 6 C. B. (NS) 336

8

7. In a case arising under the Sea Customs Act (1878),

the Privy Counsel in Secretary of State v. Mask 3

observed as follows:

“It is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the civil courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principle of judicial procedure."

8. Section 17 of the Madhya Bharat Sales Tax Act, 1950

barred the jurisdiction of any court in matters pertaining to

assessments made under the Act. The recovery of Sales

Tax under the said Act was the subject matter of civil suits

filed by the asessees. The State objected to the

maintainability of the civil suits on the ground that

jurisdiction of civil court was barred. After taking note of

several judgements of this Court on the point of ouster of

jurisdiction of the civil courts, Hidayatullah, J. in

Dhulabhai and Ors. v. The State of Madhya Pradesh

and Anr.4 observed as follows:

3

AIR 1940 PC 105 4 1968 (3) SCR 662 at 682

9 (1) Where the Statute gives a finality to the orders of the special tribunals the Civil Courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit.

Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.

(2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the Civil Court.

Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the Statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said Statute or not. (3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.

10 (4) When a provision is already declared unconstitutional. or the constitutionality of any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit. (5) Where the particular Act contains no machinery for refund' of tax collected in excess of constitutional limits or illegally collected a suit lies.

(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the scheme of the particular Act must be examined because it is a relevant enquiry.

(7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply.

9. A perusal of the relevant provisions of the Act would

show that there is no express bar on the jurisdiction of

Courts. However, Section 169 of the Act provides for an

appeal to the Municipal Taxation Tribunal. Section 171 of

the Act provides that the order of the Municipal Taxation

Tribunal in the appeal filed by the Assessee shall be final.

According to the Corporation, the aforementioned

11 Sections, read together, create a bar on the jurisdiction of

civil courts.

10. Any person having a grievance that he had been

wronged or his right has been affected can approach a civil

court on the principle of 'ubi jus ibi remedium' - where

there is a right, there is a remedy. As no internal remedy

had been provided in different statutes creating rights or

liabilities, the ordinary civil courts had to examine the

grievances in the light of those statutes. With the advent

of a ‘Welfare State’, it was realised that enactments

creating liabilities in respect of payment of taxes,

obligations after vesting of estates and conferring rights on

a class of citizens, should be complete codes by

themselves. With that object in view, forums were created

under the Acts themselves where grievances could be

entertained on behalf of the persons aggrieved5.

11. Wherever a right or liability, not pre-existing in

common law is created by a statute and that statute itself

provides a machinery for enforcement of such right or

liability, both the right/liability and the remedy having

been created uno flatu and a finality is intended to the 5 Shiv Kumar Chadha Etc. Etc v. Municipal Corporation of Delhi (1993) 3 SCC 161

12 result of the statutory proceedings, then, even in the

absence of an exclusionary provision the jurisdiction of the

civil court is impliedly barred6.

12. We find that a liability for payment of tax is created

by the Delhi Municipal Corporation Act, 1957. Further, a

remedy by way of an appeal against an order of

assessment, before an appropriate forum or authority, has

been provided by the same statute.

13. As to various issues on the correctness of a return

itself, or whether or not a return is correct; whether or not

transactions which are not mentioned in the return, but

about which the appropriate authority has knowledge, fall

within the mischief of the charging section; what is the

true or real extent of the transactions which are

assessable; all these and other allied questions have to be

determined by the appropriate authorities themselves. An

assessment, based even on an erroneous finding about the

character of the transaction, is an assessment made well

within jurisdiction and cannot be said to be outside the

purview of the Act7. In a case arising out of the Madras

6 Raja Ram Kumar Bhargava (Dead) By LRs v. Union of India (1988) 1 SCC 681 7 Kamala Mills Ltd v. State of Bombay (1966) 1 SCR 64

13 General Sales Tax Act, this Court observed that the

expression “any assessment made under this act” is wide

enough to cover all assessments made by the appropriate

authority under the Act, whether the said assessments are

correct or not.8 If the appropriate authority has been given

the jurisdiction to determine the nature of the transaction

and proceed to levy a tax in accordance with its decision,

even if such issue is erroneously determined by the

authority, the tax levied by it in accordance with its

decision cannot be said to be ‘without jurisdiction’. See

(Kamla Mills - supra).

14. Applying the criteria mentioned in Dhulabhai

(supra), we are of the opinion that the Civil Court’s

jurisdiction is impliedly barred for the following reasons:

(i) There is no pre-existing liability of tax under Common

Law. The liability has been created by Delhi Municipal

Corporation Act along with a remedy by way of an

appeal to the Municipal Taxation Tribunal. Necessarily,

where a party aggrieved by the decision of the

authorities has to resort to the remedy provided

under the Statute, civil courts’ jurisdiction is barred.

8 Firm of Illuri Subbaya Chetty and Sons v. State of Andhra Pradesh, AIR 1964 SC 322

14 See (In Firm Seth Radha Kishan v.

Administrator, Municipal Committee, Ludhiana9,

Firm of Illury Subbayya and In Ram Swarup and

Ors. v. Shikar Chand10.

(ii) Section 171 of the Act gives finality to orders passed

by Municipal Taxation Tribunal, which shows the

intendment of the legislature to exclude jurisdiction of

civil courts.

(iii) The remedy provided by Section 169 of the Act is an

adequate and effective remedy. We are not in

agreement with the High Court that an appeal

provided by the Statute against orders of

assessments, containing an ‘onerous’ pre-condition of

deposit of the entire amount in dispute, is not an

effective remedy.

15. We seek support for these views from a judgement of

this Court in Srikant K. Jituri v. Corporation of the City

of Belgaum11. The question that arose for consideration of

this Court in the said judgment was regarding the

jurisdiction the civil courts being barred by Rule 25 9 AIR 1963 SC 1547 10 AIR 1966 SC 893 11 (1994) 6 SCC 572

15 contained in Part-I of Schedule-III of the Karnataka

Municipal Corporations Act, 1976. Resolving the dispute

about the maintainability of a civil suit against the order

passed by the revisional authority, this Court held that the

suit was not maintainable. In the said case, the submission

on behalf of the Assessee was that the right to second

appeal to the District Court as per the provisions of the Act

was coupled with an onerous condition i.e. deposit of the

entire amount of property tax. Hence, it was pleaded that

the remedy provided under the Act was not adequate.

This Court rejected the said submission by holding that the

alternate remedy provided by a statute not being an

adequate or efficacious remedy, is not a ground for

maintaining a civil suit. However, this Court was of the

opinion that a Writ Petition under Article 226 is

maintainable if the remedy provided in the statute is not

efficacious.

16. We have examined the plaint filed by the

Respondents carefully. We do not see any allegation made

regarding the violation of any provisions of the statute.

There is also no pleading with regard to non-compliance of

16 any fundamental provisions of the statute. It is settled law

that jurisdiction of the civil courts cannot be completely

taken away in spite of either an express or implied bar. The

civil courts shall have jurisdiction to examine a matter in

which there is an allegation of non-compliance of the

provisions of the statute or any of the fundamental

principles of judicial procedure. A plain reading of the

plaint would suggest that the order impugned in the suit is

at the most an erroneous order. No jurisdictional error is

pleaded in the plaint. Therefore, the question of

maintainability of the suit does not arise. In the absence of

any pleadings in the plaint, the High Court ought not to

have remanded the matter back to the learned Single

Judge.

17. For the aforementioned reasons, judgement of the

Division Bench of the High Court is set aside and the

appeals are allowed.

..…................................J. [L. NAGESWARA RAO]

17 ..

….............................J. [HEMANT GUPTA] New Delhi, August 19, 2019

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