Shyam Kishore and Another vs Municipal Corporation of Delhi

R.C. Jain, J.—This Second Appeal raises a short legal question -- Whether a civil suit challenging the rateable value assessed by the Municipal Corporation of Delhi under the provisions of Delhi Municipal Corporation Act, 1957 is barred in view of the provisions of Section 169 of the Act?

The appellants herein had filed four suits for permanent injunction against the respondent-MCD for restraining them from recovering property tax with respect to property No.450 to 453, Ward No.V,Chandni Chowk at a rateable value of Rs.24,400/-w.e.f.1.4.75. It was averred that the assessment of the aforesaid rateable value was illegal and without jurisdiction and in any case excessive in as much as the standard rent and agreed rent of the premises was much less. The suits were contested by the defendant-MCD inter alias on the ground that the suits were not maintainable in view of the provisions of Sections 169-170 and 477-478 of the Delhi Municipal Corporation Act and the civil court had no jurisdiction to try the suit. The trial court answered both the objections in negative and decreed the suits of the appellant and restrained the MCD from recovering property tax for the year 1976-77 up to the period ending 31st March, 1980 at a rateable value higher than Rs.6610/- per annum.

Aggrieved by the said judgment and decree of the trial court, the MCD filed an appeal. The appellate court allowed the appeal and dismissed the suits primarily on the ground that jurisdiction of the civil court was barred in a matter relating to the assessment of house tax particularly when the relief sought by the plaintiff could be obtained by filing a statutory appeal which was the proper and efficacious remedy available under the statute.

I have heard learned counsel for the parties and have given my thoughtful consideration to their respective submissions. At the outset, learned counsel for the appellant has submitted that the above question of law has been considered and answered by a Division Bench of this Court in the case of Ganga Ram Hospital Trust Vs.MCD 92 (2001) DLT 775. The court on a consideration of the provisions of the DMC Act has held as under :-

"Section 169 provides for a remedy of appeal against levy or assessment of any tax under the Act while Section 170 lays down conditions subject to which the right of appeal conferred by Section 169 can be exercised. Neither of these two sections contain any provision barring a civil suit to challenge levy and assessment of tax under the Act. At best it may be argued that in view of the remedy of appeal provided u/s 169 of the Act a party should have recourse to the said remedy. But the party filing a civil suit to challenge the levy and assessment of tax under the Act may like to urge that the levyand assessment of tax is not in accordance with the Act or is vocative of the provisions of the Act. In other words it may be the case of a plaintiff that the Authorities under the Act have not acted in accordance with the provisions of the Act while levying and assessing tax and, Therefore, it is entitled to exercise its inherent right to challenge such a levy and assessment by way of a civil suit. Availability of an alternative remedy may be treated as a bar by the Court while exercising its writ jurisdiction because writ jurisdiction under Article 226 of the Constitution of India is a matter of exercise of discretionary jurisdiction of the Court but it is not the same case while entertaining a civil suit. Exercise of jurisdiction to entertain civil suit is not a discretionary matter before the Civil Court. A Civil Court may reject the plaint as per law or dismiss a civil suit on merits. It cannot refuse to entertain the suit unless barred by law. The DMC Act does not contain any such bar to a civil suit in matters of levy and assessment of tax."

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"The result of the above discussion is that the impugned judgment of the Trial Court holding that a civil suit is not maintainable cannot be sustained. The finding of the Trial Court on the preliminary issue is hereby set aside. It is held that a civil suit to challenge levy and assessment of tax is not barred in view of Section 169 of the Act. A civil suit in such cases is maintainable. It is, however, a different matter whether on merits a plaintiff is able to make out a case in its favor in the suit. On question of merits of the controversy in the suit we say nothing. The Trial Court dismissed the suit on the threshold holding it is not maintainable and, Therefore, we have only considered the question of maintainability of a civil suit in this appeal. The appeal is allowed and the impugned judgment of the Trial court is set aside. The suit is remanded back to the Trial Court for decision in accordance with law. In the facts and circumstances of the case, there will be no order as to costs."

In view of the legal position emerging from the above decision, the judgment passed by the first appellate court holding that the jurisdiction of the civil court to entertain and try the matter relating to the assessment of house tax is barred, cannot be sustained and is liable to be set aside. However, as the judgment of the First Appellate court is confined only to the maintainability of the suit and no finding was rendered on the merits of the appeal though the impugned judgment and decree of the trial court was sought to be challenged on merits also on several grounds, this court is of the opinion that the appealfiled by the MCD should be heard and disposed of on merits.

6.In the result this appeal succeeds and is hereby allowed and the impugned judgment and decree of the First Appellate court dated 9.3.98 is hereby set aside and the matter is remanded back to the First Appellate court to dispose of the appeal of the MCD on merits. Parties are directed to appear before the learned District Judge, Delhi on 28th May, 2002 who will either hear the appeal of the MCD himself or will make over the same to an Additional District Judge for hearing and disposal of the appeal on merits in accordance with law.