Bombay High Court Directs Mira-Bhayandar Municipal Corporation to Give Fresh Hearing on Penalty and Interest Demands, Stays Coercive Recovery Pending Decision. The Corporation's Action of Withdrawing One Notice and Issuing Another Recovery Notices on Same Day Was Viewed as Uncalled For, and the Court Ordered Consideration of Deemed Permissions and Pending Regularizations.

Writ petition under Article 226 of the Constitution challenging the coercive recovery of penalty and interest by the Municipal Corporation in relation to property taxes for mobile towers.

Petitioner sought to quash the impugned notices and restrain the Corporation from taking coercive steps for recovery of penalty and interest without due process.

The Corporation had issued a notice demanding penalty and interest, and on the same day that the earlier petition was disposed of with the Corporation withdrawing that notice, the Corporation served a fresh notice dated 31 March 2017 to the Registrar, Small Causes Court and HDFC Bank, seeking to recover outstanding dues, which the petitioner considered as coercive and in violation of the undertaking given in the earlier petition.

Earlier Writ Petition No.3211 of 2017 was disposed of on 6 April 2017 with the Corporation withdrawing the impugned notice dated 8 February 2017 and agreeing to give 72 hours notice before taking any action. Also, on 7 April 2017, in this petition, ad-interim relief was granted and the Corporation was directed to file details.

Whether the Municipal Corporation's action of issuing recovery notices to the bank and court while the earlier petition was being disposed of was arbitrary and mala fide. Whether the petitioner is entitled to a hearing before imposition of penalty and interest. Whether the Corporation should consider the specific instances of deemed permission, pending regularization and actual permissions before demanding penalty and interest.

The petitioner contended that in some cases there was deemed permission for erecting towers, in some cases applications for regularization are still pending, and in some cases actual permission was granted; therefore, the penalty and interest demands are unjustified. The petitioner alleged that the Corporation's withdrawal of the earlier notice was motivated and that the subsequent recovery action was uncalled for. The Corporation's counsel stated that the petitioner would be heard afresh by the appropriate authority, and a decision would be taken and communicated within eight weeks.

Before a municipal corporation resorts to coercive recovery of penalty and interest, the assessee is entitled to a hearing, and the corporation must consider specific circumstances such as deemed permissions, pending regularization applications, and actual permissions, to avoid further litigation. If an adverse decision is taken, it must be communicated to the assessee and not implemented for at least 72 hours to allow the assessee to seek redress.

Mr. Bubna, learned counsel appearing for the Respondent- Municipal Corporation, on instructions, submits that in respect of the subject bills demanding penalty (shasti) , the Petitioner will be heard afresh by the appropriate authority, designated for the said purpose by the Respondent-Municipal Corporation and a decision will be taken thereafter... Mr. Dwarkadas ... submits that the Petitioner is raising issues that; (i) in some cases, there was a deemed permission for erecting the towers; (ii) in some cases, the applications for regularization are still pending; and (iii) in some cases, actual permission to erect the towers was granted. We direct that, in case the decision taken by the Respondent- Municipal Corporation is adverse to the Petitioner, the same shall not be effected without giving 72 hours clear notice to the Petitioner. the Respondent-Municipal Corporation shall not resort to the coercive methods in respect of the subject matter till the decision is taken on the issues raised by the Petitioner.

The petitioner had earlier filed Writ Petition No.3211 of 2017 challenging a notice dated 8 February 2017 demanding penalty and interest. That petition was disposed of on 6 April 2017 after the Corporation withdrew the notice and undertook to give 72 hours' notice before any action. However, the petitioner received a copy of a notice dated 31 March 2017 addressed to the Registrar, Small Causes Court and HDFC Bank, seeking recovery of dues. The present petition was filed thereafter. On 7 April 2017, the court granted ad-interim relief in terms of prayer clauses (d) and (e), stayed coercive recovery, and directed the Corporation to file details. The matter was then fixed for 10 April 2017 and finally heard on 4 May 2017, when the Corporation agreed to hear the petitioner afresh and the court disposed of the petition with directions.

• Maharashtra Municipal Corporations Act, 1949: