Case Note & Summary
The petitioners, owners of five premises in Maker Chamber V, Nariman Point, Mumbai, challenged an order of the Small Causes Court that required them to deposit the entire increased property tax for the whole building (Rs.2,03,56,651) as a pre-condition for hearing their appeal against the revised rateable value. The Municipal Corporation had fixed the rateable value at Rs.1950 per 10 square meters, up from Rs.275, leading to a substantial tax demand. The petitioners' appeal under Section 217 of the Bombay Municipal Corporation Act, 1888, was stayed unless the entire building's tax was deposited. They argued this was impossible and unjust, relying on Calcutta Gujarati Education Society v. Calcutta Municipal Corporation, (2003) 10 SCC 533, which held that requiring a tenant to deposit the entire building's tax to appeal is inequitable. The respondent society contended that it had filed a writ petition against the rateable value order, which was stayed, and thus the appeal should not be entertained. The court found that this fact was not disclosed before the Small Causes Court and could not now be used to defeat the appeal. The corporation relied on Assistant General Manager, Central Bank of India v. Commissioner, Municipal Corporation for Ahmedabad, (1995) 4 SCC 696, which held that tenants must deposit the entire one premises tax, even if occupying only part. The High Court distinguished this by noting that the petitioners were not tenants but owners of specific premises, and that requiring deposit of the entire building's tax by a few flat owners would virtually deny access to justice. The court held that the condition was harsh and inequitable, and that the petitioners need only deposit the tax attributable to their five premises. The orders dated 11.8.2009 and 24.2.2010 were quashed, and the appeal was to proceed on deposit of proportionate tax.
Headnote
A) Municipal Law - Property Tax - Appeal and Pre-Deposit - Bombay Municipal Corporation Act, 1888, Section 217 - The petitioners, owners of five premises in a building, filed an appeal against increased rateable value; the Small Causes Court directed deposit of the entire tax for the whole building as a condition for hearing the appeal - The court held that requiring individual flat owners to deposit tax for the entire building is harsh, inequitable, and virtually denies the right of appeal - Held that the deposit should be proportionate to the premises owned by the appellants (Paras 9-11).
B) Civil Procedure - Res Judicata/Estoppel - Effect of Pending Writ Petition - The respondent society had filed a separate writ petition against the rateable value order and obtained stay, but this was not brought to the notice of the Small Causes Court - Held that the respondents cannot later object to the maintainability of the appeal when they did not raise this before the Small Causes Court (Paras 12-13).
Issue of Consideration
Whether the Small Causes Court was justified in directing the petitioners to deposit the entire increased rateable value for the whole building as a condition for hearing their municipal appeal, instead of only the amount attributable to their owned premises.
Final Decision
Writ petition allowed. Orders dated 11.8.2009 and 24.2.2010 quashed. Petitioners directed to deposit increased tax only to the extent of the five premises owned and occupied by them, i.e., proportionate to their premises, and the appeal to proceed accordingly.
Law Points
- Legal points not extracted
- Right of appeal of tenant/occupier
- Condition of pre-deposit of entire tax
- Interpretation that requiring deposit of entire building's tax is inequitable
- Reliance on Calcutta Gujarati Education Society case
- Section 217 of Bombay Municipal Corporation Act
- Section 406 of Bombay Provincial Municipal Corporation Act
Case Details
2010 LawText (BOM) (07) 110
Writ Petition No. 938 of 2010
Citation not available, 2010:BHC-OS:7831
Mr. P. M. Haridas for the Petitioners; Mr. S.S. Pakale a/w Ms. Trupti Puranik for Respondent No.1; Mr. Narayan Sahu i/by Federal & Rashmikant for Respondent No.2
Satyavati Ramprasad Ruia and Ajaykant Ramprasad Ruia
The Municipal Corporation of Brihan Mumbai and Maker Chamber V Premises Cooperative Housing Society Limited
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Nature of Litigation
Writ petition challenging orders of Small Causes Court regarding deposit of property tax as a condition for hearing a municipal appeal against increased rateable value.
Remedy Sought
Petitioners sought to quash the order dated 11.8.2009 directing deposit of entire increased rateable value for the whole building, and the order dated 24.2.2010 dismissing review, and to allow deposit only of tax attributable to their own five premises.
Filing Reason
The Small Causes Court required deposit of Rs.2,03,56,651 (tax for entire 300 premises in the building) which petitioners could not afford, thereby virtually denying their right of appeal.
Previous Decisions
Small Causes Court in Municipal Appeal (ST) No.1019 of 2004 ordered deposit of Rs.2,03,56,651 on 11.8.2009; review application dismissed on 24.2.2010.
Issues
Whether the Small Causes Court could direct individual flat owners to deposit the entire increased rateable value for the whole building as a pre-condition for hearing their appeal under Section 217 of the Bombay Municipal Corporation Act, 1888.
Submissions/Arguments
Petitioners argued that being owners of only five premises, the condition to deposit tax for entire building was unjust and impossible; relied on Calcutta Gujarati Education Society case.
Respondent Society contended that it had filed a writ petition against the rateable value order which was stayed, so the appeal should not have been entertained.
Respondent Corporation argued that Section 217 of the BMC Act and Section 406 of the BPMC Act are identical, and the Supreme Court in Central Bank of India held that a tenant must deposit the entire disputed tax for the whole premises.
Ratio Decidendi
Where a owner/occupier of a part of a building files a municipal appeal against property tax assessment, requiring them to deposit the entire tax for the whole building is harsh, inequitable, and would virtually deny the right of appeal; they are only required to deposit the tax proportionate to their own premises, following the principle in Calcutta Gujarati Education Society v. Calcutta Municipal Corporation.
Judgment Excerpts
There is great force in the submission made that where the tenant is occupying only a portion of the building and his liability towards “consolidated rate” or “surcharge” is proportionately restricted to the portion of the building in his occupation, for exercising right of appeal, to make it compulsory for him to deposit the entire consolidated rate assessed and levied on the whole building, is inequitable. (Quoting Calcutta Gujarati Education Society, para 10)
It is therefore submitted that the said order passed by the learned Judge of the Small Causes Court, Mumbai is unjust and harsh to the Petitioners. The Petitioners are not in a position to deposit such a huge amount and consequently will not be able to seek justice in the matter of wrongful increase in the rateable value of the said premises by the Respondent No.1. (Para 9)
Admittedly the Petitioners were not aware of the said writ petition filed by the Society and the orders passed therein. Admittedly the Respondents, had not pointed out to the Small Causes Court that a Writ Petition impugning the order of Respondent No.1 dated 28.4.2004 is filed by Respondent No.2 in this Court and the order dated 28th April, 2004 is stayed. In view thereof, the Respondents now cannot be heard to say that the Small Causes Court ought not to have entertained the Appeal filed by the Petitioners impugning the order dated 28th April, 2004 passed by the Respondent No.1. (Para 13)
Procedural History
On 1.10.2002, Respondent No.1 Corporation issued a bill to the society based on increased rateable value. The society lodged a complaint, and on 20.4.2004, the rateable value was fixed at Rs.1950 per 10 sq m. Petitioners filed Municipal Appeal No.1019 of 2004 under Section 217 of the BMC Act before the Small Causes Court. On 11.8.2009, the Small Causes Court directed the petitioners to deposit Rs.2,03,56,651 (tax for whole building) within one month. Petitioners filed a review application on 26.11.2009, which was dismissed on 24.2.2010. The writ petition challenging both orders was filed thereafter, and by consent, rule was made returnable forthwith and finally heard.
Acts & Sections
- Bombay Municipal Corporation Act, 1888: 217
- Bombay Provincial Municipal Corporation Act, 1949: 406
