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Judgment
Kanhaiyaji, J.—This appeal has been filed by Messrs. Dhalbhum Trades and Industries Ltd., hereinafter called ''the Company'' defendant No. 1 of Money Suit No. 11/4 of 1962/ 63, instituted by the Jugsalai Notified Area Committee, hereinafter called ''the Municipality''.
The Municipality filed the suit; for realisation of arrears of Municipal taxes in respect of a hat bearing holding No. 311. The total claim of the Municipality was Rs. 10,990.39 paise for the period from the second quarter; of the year 1955-56 to the second quarter of the year 1961-62. The claim of the Municipality included holding tax, latrine tax, water tax and light tax, besides interests.
The holding (market place) stood recorded in the Municipal Demand Register in the name of Raja Jagdish Chandra Deo Dhabal Deb, the proprietor of Dhalbhum estate. The Raja gave a lease of the said market place along with other hats to the Company under a registered deed of lease dated the 11th September, 1947 (Ext. A). The estate of the Raja vested in the State of Bihar under the Bihar Land Reforms Act with effect from the 12th November, 1951. The Company under two registered deeds dated the 14th September, 1953 and 22nd November, 1955 (Exts. B and B/1 respectively) authorised Shri Mahabir Singh, defendant No. 9, to collect tolls in the hats.
On the 28th January, 1958, Raja Jagdish Chandra Deo Dhabal Deb died leaving behind his sons and a widow. Defendants 2 to 7 are the sons and defendant No. 8 is the widow of the Raja. These facts are borne out by the documents on record and have not been disputed by the parties.
The case of the plaintiff is that the defendants are regular defaulters in payment of Municipal taxes which are due. The plaintiff is, therefore, entitled to get a decree in respect of the amount due on account of arrears of Municipal Taxes, as aforesaid, with interest at the rate of six per cent per annum. The plaintiff made out 0 specific case in the plaint that defendant No. 1, the Company, claims to have taken the aforesaid holding from the Raja and claims to be the owner of the holding. In reply to the Demand notice sent to the Company, Shri B.C. Chakravorty, the Managing Director of the Company, by his letter dated the 18th September, 1959, acknowledged the liability of the. Company and promised to pay the dues within two months, but no payment had been made. It is averred in the plaint that thereafter in a meeting of the Commissioners it was resolved to file a suit against the defendants for realisation of the arrears of municipal taxes. It is further stated in the plaint that the cause of action for the suit arose from the 1st October, 1955, being the date of default for the taxes of the second quarter of 1955-56 and from each date of default in payment of the taxes for the subsequent quarters and also from the 18th September, 1959, when the liability was acknowledged by defendant No. 1.
The widow, defendant No. 8, filed no written statement. Defendants 2 to 7, the sons of the late Raja, filed one joint written statement denying their liability to pay the taxes, Defendant No. 1 filed a separate written statement denying its liability for the taxes claimed by the Municipality. Two paragraphs of the written statement are essential to be quoted in full which will have bearing on the decision of the appeal. They are as follows :
That the statements in paragraphs 3 and 4 are incorrect and are denied. Nothing is due from this defendant on account of Municipal taxes. That the holding in question (transferred by sale by registered document) was by a registered lease to one Sri Mahabir Singh of Jugsalai who is the owner-sub-lessee of the holding and under the law and in terms of the said deed all arrears of Municipal taxes are payable by him and in that consideration the holding was transferred to him.
That the statements in paragraph 9 of the plaint are incorrect and are denied. If there be any letter dated 18-9-59 from Sri B.C. Chakravarty, the same is not an acknowledgment of liability as alleged and this defendant cannot be made liable only on account of and on the basis of that letter under the law.
On the allegations made by defendants 1 to 8 that Mahabir Singh is liable for payment of the Municipal taxes, claimed in the suit, Mahabir Singh was added as defendant No. 9 and he filed his written statement contending that the was neither the owner nor the occupier of the aforesaid hat bearing holding No. 311 and that the plaintiff was not entitled to realise Municipal taxes from him.
The defendants also pleaded in their written statement that the plaintiff had no cause of action, that the suit, as framed was not maintainable, that the suit was barred by limitation and was bad for multifarious-ness, non-joinder of parties and misjoinder of the State of Bihar.
The learned Additional Subordinate Judge framed nine issues, One of the issues, namely, issue No. 3 is whether the suit is barred by limitation. The learned Additional Subordinate Judge rightly held under this issue that the period of limitation for realisation of Municipal taxes is six years commencing from the date on which, the tax becomes due. The present suit was instituted on the 4th January, 1962. Hence, the arrear of taxes which had, fallen due prior to the 4th January, 1956, was obviously barred by limitation. In so far as Mahabir, defendant No. 9, is concerned, the Municipal tax is barred by limitation up to the second quarter of the year 1956, because he had been made a party to the suit by order dated the 26th July, 1962, while the Municipal tax up to fourth quarter of the year 1955-56 is barred by the law of limitation against defendants 2 to 8. He further held that no portion of the Municipal taxes, claimed in the suit, is barred by limitation against defendant No. 1, because the liability to pay the taxes had been admitted by a letter (Ext. 3) dated the 18th September, 1959. The parties conceded before the Additional Subordinate Judge that defendants 2 to 8 were not liable to pay the arrears of taxes claimed in the suit and secondly they were neither necessary nor proper parties. The parties further conceded that defendant No. 9, Mahabir Singh, who was neither the owner nor the occupier of the aforesaid hat. bearing holding No. 311, was not liable to pay the arrears of taxes, whereas defendant No. 1 was the owner of the said hat as a tenant under the State of Bihar as landlord and the shop-keepers holding shops thereon were occupiers within the meaning of the provisions of the Bihar and Orissa Municipal Act, hereinafter called ''the Act''. As the arrears of the Municipal taxes as claimed in the suit had not been paid, the learned Additional Subordinate Judge held that the plaintiff was entitled to realise the same from defendant No. 1 only and decreed the suit accordingly.
The learned lawyer, appearing for the appellant, contended before us that there was no liability on the appellant (defendant No. 1) to pay the Municipal taxes, as it was never recorded as owner of the holding by the Municipality with regard to which taxes, are being claimed. He referred to the deposition of witness No. 1 for the plaintiff (Law clerk of the Municipality) who deposed that the holding was recorded in the office of the Municipality in the name of Raja Jagdish Chandra Deo Phabal Deb and the name of defendant No. 1 was not mentioned any where in the Demand Register. The point of law raised is correct and is supported by a Bench decision of this Court in Patna Municipal Corporation v. Ladley Saran 1963 BLJR 214. In this case, it has been laid down that the word ''owner'' in Section 100 of the Act means only the person who is recorded as such by the Municipality. But, in the. instant case, factual position is entirely different. The conduct of defendant No. 1 amounted to an admission that it was liable for the payment of the taxes claimed by the Municipality. I have already referred to the statements contained in the plaint and in the written statement of the Company. The Vice-Chairman of the Municipality wrote a letter (Ext. 1/B) to the Company requesting to pay up the taxes due without further delay. The Company sent a reply to the above letter on the 18th September, 1959, the relevant portion whereof is as follows :
We beg to acknowledge receipt of your letter No. 1819 dated 14-9-59 demanding payment of the outstanding amounts due for different markets of the Company in your arrears. We are requesting the Government for fixation of rent for the Jugsalai Bazar. We hope to make payment of all your dues following the said fixation of rent or, in any case, within next two months time. We hope, there will be no great difficulty for you to allow us time for making the said payment." This letter (Ext. 3) is signed by the Director of M/S B. Chakravarty and Co. (Private) Ltd., the Managing Agents of the Company. The Municipality, it appears, believed the statement, and, after waiting for two months, sent a request to Shri Chakravorty to send arrears as early as possible (vide Ext. 4). But, when no tax was paid, the suit was filed by the Municipality. Defendants 1 to 8 examined only one witness in the suit. D. W. 1, who is an employee of the Company, he deposed that the Dhalbhum estate vested in the State of Bihar on the 12th November, 1951, and, prior to the vesting, Raja Saheb gave holding No. 311 together with other properties to defendant No. 1 on lease. The said lease is Ext. A. He further stated that defendant No. 1 executed a registered deed of lease (Ext. B) in favour of Mahabir Singh, defendant No. 9 He admitted in cross examination that hat is held on holding No. 311, am defendant No. 1 pays its rent to the Bihar Government, and, the lease right of defendant No. 1 is still intact. Then is no brick built house on holding no 311, but there are some tin sheds. According to Section 3(18) of the Act, the word ''owner'' includes "every person who is entitled for the time being to receive any rent in respect of the land with regard to which the word is used, whether from the occupier or otherwise." This fact is not disputed that the holding in suit is one block of land on which some temporary structures have been constructed. The lawyer appearing for the Company rightly conceded at the time of the hearing of the suit in the court below that the Company (defendant No. 1) is the owner of the said hat as tenant under the State of Bihar as landlord and the shop-keepers, who hold shops thereon are tile occupiers within the meaning of the provisions of the Act. The Company as the owner of the hat admitted by its letter dated the 18th September, 1959, to pay the taxes. When it did not it dispute, its liability to pay the taxes, it cannot subsequently turn round and challenge, the demand on the ground of lack of liability on its part. Besides the admission of liability, in my view, the principle of estoppel will also apply in this case. The rule of estoppel is based on equity and good conscience. If a person by representation or conduct amounting to representation induces another person to act as he would not otherwise have done, the person who made the representation cannot be allowed to the loss and injury of the person who acted on it.
It was next contended on behalf of the appellant that the Company was not liable to pay the latrine tax, which is only payable by the persons in actual occupation of the holdings as provided by Section 100 of the Act. Reliance was placed in support of this contention on several decisions of this Court, namely, in Patna City Municipality Vs. Krishnavati Bahoo, Satyadeo Narain Lal Vs. Municipal Commissioners and Others, , Patna Municipal Corporation v. Raja Ramchandra Prasad 1962 BLJR 801 and Commissioners of Darbhanga Municipality v. State of Bihar 1965 BLJR 602. In all these cases, it has been laid down that the latrine tax is payable not by the owner but by the person in actual occupation of the holding. But this liability is not absolute. In certain circumstances the liability to pay latrine tax shifts on the owner of the holding. If the occupier does not approach the Municipality for assessment of the latrine tax in his name, or if the owner does not make a similar prayer, what will be the duty of the Municipality in such a case ? As observed by Kanhaiya Singh, J. in Patna Municipal Corporation v. Raja Ram Chandra Prasad 1962 BLJR 801 the occupier cannot be sued for latrine tax unless his name is also mentioned in the assessment register. When the liability to pay the latrine tax is not disputed by the owner when the assessment is made and allows the assessment list to be prepared in his name in respect of all the liabilities, he cannot subsequently turn round and challenge the demand on the ground of lack of liability on his part. Besides, Section 135 of the Act provides as follows :
If any holding is occupied in severalty by more than one person, the Commissioners may levy the latrine tax from the owner of such holding who may recover from each occupier such sum as shall bear to the entire amount of the tax so levied the same proportion as the value of. the part of the holding in the occupation of such person bears to the entire value of such holding.
In view of the provisions of this section, it is manifest that the Municipality may levy the latrine tax from the owner of such holding which is occupied in severally by more than one person. Admittedly, there are several tin sheds on holding No. 311, which are occupied by different persons. Therefore, the demand of the latrine tax from the owner in this situation can not be held to be illegal. The liability to pay the latrine tax under the Act is on the occupier of the holding, but this is subject to the provisions of Section 135 of the Act. For the reasons given above, there is no substance in this contention as well.
The learned lawyer appearing for the appellant further contended that there is no evidence on record to show that Shri B.C. Chakravorty was authorised to acknowledge the liability on behalf of the Company. The letter (Ext. 3) bears the signature of Shri B.C. Chakravorty. The Company cannot be bound, unless it is established by evidence that Shri Chakravorty was authorised by the Company to acknowledge the liability on behalf of the Company. This contention has been raised for the first time in this appeal. The appellant, as it appears from paragraph 11 of its written statement, disputed the factum of liability and not of authority. The letter (Ext. 3) has been signed by Shri B.C. Chakravorty for B. Chakravorty and Co. (Private) Ltd., Managing Agent of the Company. It is true that people dealing with a corporate body are fixed with the limitations of the powers contained in its memorandum, articles and the provisions of the statutes; but unless the Company disputes the authority and establishes by evidence that the act of the officer was ultra vires, the Company is liable for all the acts done by its Directors and principal officers, provided such acts are within the apparent authority of the Directors and principal officers. In this case, the appellant did not join the issue on this point in the court below and has given no evidence to show that Shri Chakravorty had no authority to acknowledge liability on behalf of the Company. The Managing Agents are entitled to the management of the whole or substantially the whole of the affairs of the Company by virtue of an agreement with the Company or by virtue of its memorandum or articles of association. In case the Company was serious in contesting the authority of Shri B.C. Chakravorty, it was incumbent on it to state the material facts in its written statement, join the issue and give evidence in court to establish that the Managing Agents had rip authority to acknowledge the liability on its behalf. In my view, there is no substance in this contention also, and it must fail.
In the circumstances, I am of the Opinion that the appellant alone is liable for the payment of the taxes claimed by the Municipality and the court below has rightly decreed the suit.
In the result, the appeal fails, and is dismissed with cost.
S.N.P. Singh, J.
I agree.