Supreme Court: Ouster Of Civil Court's Jurisdiction Won't Have Retrospective Effect To Annul A Decree Validly Passed By Civil Court

 It is settled law that ouster of jurisdiction of civil court can be expressed or implied, but it cannot have retrospective effect annulling a decree validly passed by the civil court. Therefore, we do not find any error of law on the part of the High Court in confirming the concurrent judgment and decrees of the Trial Court and the first Appellate Court. Hence, this appeal is dismissed, without any order as to costs.

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3936 OF 2013;

ANANTA CHANDRAKANT BHONSULE (D)BY LRS & ANR.

Vs TRIVIKRAM ATMARAM KORJUENKAR (D) BY LRS. & ANR.

Coram: V. RAMASUBRAMANIAN; J., PANKAJ MITHAL; J.

Dated: FEBRUARY 09, 2023

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Whether Civil Suit Claiming Reliefs Beyond Scope Of The MHADA Act Which Bars Jurisdiction of Civil court Is Maintainable?

The preamble to the Act states that it is an Act to "unify, consolidate and amend the laws relating to housing, repairing and reconstructing dangerous buildings and carrying out improvement works in slum areas". The scheme of the statute provides that the Board constituted under the statute would have the power to repair and reconstruct dilapidated buildings, conduct structural repairs and evict persons from authority premises, among others. The objective of the bodies and authorities constituted under the Act is to ensure repairing and reconstructing buildings to provide housing. Undoubtedly, the competent authority has the jurisdiction to order eviction in terms of the provisions of Section 66. But that is not the frame of the suit or the relief which has been claimed by the Appellant in the suit. The reliefs sought by the Appellant in the plaint are: (i) the removal of the unauthorized construction; (ii) a permanent prohibitory injunction restraining the Defendants from constructing over the open site and causing 'nuisance'; and (iii) restoration of the water connection as it was prior to the construction. The Appellant instituted the suit for injunction because her easements were infringed by the illegal construction which the first Respondent had erected on the open space. The reliefs claimed by the Appellant are beyond the scope of the Act. A suit of this nature will be maintainable before the civil court and would not be barred by Section 71 or Section 177 of the Act.

{Para 16}

 IN THE SUPREME COURT OF INDIA

Civil Appeal No. 5216 of 2022

Decided On: 08.08.2022

 Rajani  Vs.  Smita and Ors.

Hon'ble Judges/Coram:

Dr. D.Y. Chandrachud and A.S. Bopanna, JJ.

Author: Dr. D.Y. Chandrachud, J.

Citation: MANU/SC/1021/2022

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Whether the civil court has jurisdiction to entertain a challenge to property tax imposed on charitable trust?

This contention of the respondent/Public Trust can be certainly raised in an appeal under Section 406 of the said Act. The exemption claimed by it, is under Section 132(1)(b) of the said Act, which is a ground that can be agitated in the appeal. It is not as if the respondent/Public Trust is prohibited from raising such a ground in the appeal or that the "Judge" does not have the authority to deal with such a ground of challenge while exercising appellate power under Section 406 of the said Act. The said contention of the respondent/Public Trust is covered under the expression "appeals against rateable value or the capital value as the case may be or tax fixed or charged under this Act" used in Section 406 of the said Act. {Para 15}

16. A perusal of the other relevant provisions of the said Act show that under Section 410 thereof, if on hearing of an appeal a question of law or construction of a document arises, the Judge may draw a statement of the facts of the case and refer such questions with his own opinion on the point for a decision of the District Court. Under Section 411 of the said Act, an appeal shall lie to the District Court from any decision of the Judge in an appeal under Section 406 thereof, by which a rateable value or capital value as the case may be is fixed or upon a question of law or usage or the construction of a document. The question whether tax is to be fixed at the rate at which the Municipal Corporation claims or it has to be nil as claimed by the respondent based on Section 132(1)(b) of the Act, can also be a subject matter of such appeal under Section 411 of the Act. Further Section 413 of the said Act provides that the decision of the District Court in an appeal under Section 411 of the Act shall be final.

17. Thus, the provisions of the aforesaid Act provide a scheme wherein the grievance of the respondent/Public Trust can be fully taken care of and, therefore, the jurisdiction of the Civil Court is impliedly ousted. Applying the propositions culled out by the Constitution Bench judgment of the Hon'ble Supreme Court in the case of Dhulabhai (supra), it becomes evident that the aforesaid Act, with which we are concerned in the present case, is covered under proposition Nos. 2 and 6. In the present case, there is no question of a challenge to the vires of any provision of the aforesaid Act and the claim of the respondent/Public Trust that the notice and bills issued by the appellant/Municipal Corporation are illegal because the respondent is entitled for exemption from payment of property tax, is a question that can very well be decided in the mechanism provided as per the aforesaid provisions of the said Act.

18. In this context, the contents of the plaint of the respondent/Public Trust need to be appreciated. The entire grievance of the respondent is that it is undertaking educational activities in the building in question and that, therefore, under Section 132(1)(b) of the said Act, it is exempt from levy of tax. It is also claimed that tax is being claimed retrospectively by the appellant/Municipal Corporation, which cannot be done. In my opinion, all these are facets of "tax fixed or charged" or the rateable value applied by the appellant/Municipal Corporation, while raising bills against the respondent/Public Trust. If the contents of the plaint are appreciated in the proper perspective, it becomes evident that there is force in the contention raised on behalf of the appellant/Municipal Corporation that the respondent/Public Trust has filed the civil suit, instead of appeal under Section 406 of the said Act, only to avoid the mandatory deposit of disputed tax claimed by the appellant/Municipal Corporation, under Section 406(2)(e) of the Act, before the appeal can be heard or decided by the Judge. Although, this aspect may not be relevant to decide as to whether the jurisdiction of the Civil Court is ousted, it does demonstrate that in such cases, by clever drafting assessees may claim that civil suit is maintainable by contending that the very levy of the tax by the Municipal Corporation is "illegal" and that there is no remedy other than filing of suit before the Civil Court. It is for the assessees like the respondent/Public Trust to demonstrate as to why the grievance sought to be raised by them cannot be addressed under the scheme manifested by the above quoted provisions of the said Act.

19. In the present case, the learned Counsel for the respondent/Public Trust has heavily relied upon the judgment of this Court in the case of Balkrishna Vora v. Poona Municipal Corporation (cited supra). In the aforesaid case, the Court was concerned with the question that the tax levied or sought to be recovered was ultra vires the powers of the Corporation. In such a situation, it was held by this Court that the machinery provided under the aforesaid Act would not be sufficient for the assessee to air his grievance and thereupon, the Court held that the jurisdiction of the Civil Court could not be said to have been ousted and that the suit was maintainable. But, in the instant case, the nature of the grievance of the respondent/Public Trust is not such that it cannot be redressed under the machinery of the aforesaid Act. Therefore, the reliance placed on the said judgment of this Court is misplaced.

 IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Appeal Against Order (AO) No. 34 of 2017

Decided On: 14.02.2018

Akola Municipal Corporation Vs. Shri Akola Gujrati Samaj

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation:  MANU/MH/0239/2018

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How to ascertain jurisdiction of wakf tribunal to entertain a proceeding?

  No doubt, while deciding the jurisdiction of the forum

to try and entertain the proceedings, the same requires to be

decided on the basis of facts pleaded in the plaint, application or

memo. Admittedly, there is no reference in the plaint that the

property is a wakf property. However, in para 10 of the plaint there is specific reference that as during the city survey, the property was recorded in the name of Wakf Board, taking disadvantage of this fact, respondent No.1 tried to induct respondent No.3 as tenant in the said property. In reply to this contention, in para 5 of the written statement filed on behalf of respondent No.1, a categorical statement is made that the plaintiff has no concern with the suit property and on the contrary the suit land belongs to Wakf Board and it reveals from the property extract that CTS No. 8796 belongs to defendant No.1 and defendant No.3 is the tenant.

Thus, the averments in plaint para 10 are supported by the

contents of para 5 of the written statement field by defendant No.1. If it is so, the issue comes under the ambit of wordings of section 85 i.e. any dispute or question or other matters relating to any wakf, and hence there is bar of jurisdiction of the Civil Court to take cognizance of the dispute. {Para 7}

IN THE HIGH COURT OF JUDICATURE OF BOMBAY

BENCH AT AURANGABAD

CIVIL REVISION APPLICATION NO.19 OF 2010

Hajra Bee w/o Sk.Ismail Vs  Maharashtra State Board of Wakfs

[CORAM : A.V.POTDAR, J.]

DATE: 31st March 2010

Citation: 2010(4) LJSOFT(URC) 1

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Whether civil court or rent court will have jurisdiction to try a suit if tenant is government undertaking?

 A perusal of the scheme of the Act 1976 would show that from the appointed day, right, title and interest of Burmah Shell with effect to Section 5(1) stood transferred and vested with the Central Government and by virtue of Section 7(2), the vesting of tenancy rights with the Central Government stood further transposed and vested in Bharat Petroleum Corporation Ltd. and that became a statutory tenant by virtue of Section 7(3) of the Act. To that extent, Section 11 of the Act has an overriding effect to the provisions of other laws. That being so, the jurisdiction indeed of a civil Court is impliedly barred from the field covered specifically by the provisions of the Act 1973 and that being the complete code determining the rights of a tenant/landlord to the exclusion of the other laws, we find no error in the view expressed by the High Court in the impugned judgment holding that the jurisdiction of the Civil Court is held to be barred and remedial mechanism for ejectment could be possible only under the provisions of the Act 1973. {Para 21}

Supreme Court

JUSTICE AJAY RASTOGI JUSTICE ABHAY S. OKA

SUBHASH CHANDER & ORS. Vs. M/S BHARAT PETROLEUM CORPORATION LTD.(BPCL) & ANR.

CIVIL APPEAL NO(s). 7517 OF 2012

28th January 2022

Author: Rastogi, J.

Citation:  2022 ALL SCR (ONLINE) 95

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Whether civil court has jurisdiction to grant a relief touching an order passed by the Tahsildar under section 5(2) of the Mamlatdar’s Courts Act, 1906?

  So far as the aspect regarding the jurisdiction of civil court to grant a relief touching an order passed by the Tahsildar under section 5(2) of the Act, true it is that an order of the Mamlatdar in such a proceeding is revisable under section 23(2) of that Act. However, conspicuously, section 22 of the Act clearly declares that any decision or order passed by the Mamlatdar would be subservient to the decision of a competent civil court in a proceeding preferred before it. Section 22 of the Act reads thus :-

“22. Subject to the provisions of section, 23 sub-section (2), the party in favour of whom the Mamlatdar issues an order for removal of an impediment of the party to whom the Mamlatdar gives possession or restores a use, or in whose favour an injunction is granted, shall continue to have the surface water upon his land flow unimpeded on to adjacent land or continue in possession or use, as the case may be, until otherwise decreed or ordered, or until ousted, by competent Civil Court:
Provided, firstly, that nothing in this section shall prevent the party against whom the Mamlatdar's decision is passed from recovering by a suit in a competent Civil Court mesne profits for the time he has been kept out of possession of any property or out of enjoyment of any use :
Provided, secondly, that in any subsequent suit or other proceeding in any Civil Court between the same parties, or other persons claiming under them, the Mamlatdar's decision respecting the possession of any property or the enjoyment of any use or respecting the title to or valuation of any crop dealt with under the proviso to sub-section (1) of section 21, shall not be held to be conclusive.”
A bare perusal of the provision would clearly indicate that irrespective of the decision of the Mamlatdar under section 5(2), a party may approach a civil court and obtain any relief even contrary to the decision of the Mamlatdar setting it at naught.  {Para 14}

Bombay High Court

JUSTICE MANGESH S. PATIL

Digambar S/o. Vitthal Kale & Ors. Vs. Vasant S/o Kacharu Kale & Ors.

SECOND APPEAL NO. 111 OF 2017

11th January 2022

Citation: 2022 NearLaw (BombayHC Aurangabad) Online 24

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Whether civil court has jurisdiction to try the suit if plaintiff challenges any notice or order passed under MRTP Act?

From aforesaid, it is, therefore, clear that if any notice or order issued under said Act by any authority is sought to be challenged before the Civil Court, then in view of the finality given to such order passed or notice issued, the jurisdiction of the Civil Court would be ousted. However, if any action sought to be taken under said Act is alleged to be null and void and sought to be taken without even issuing any notice or passing any order, then the jurisdiction of the Civil Court is not ousted and the Civil Court can examine the validity of such action which is alleged to be null and void. Similarly, the plaint must contain all statements of material facts that are necessary to invest such jurisdiction with the Civil Court. {Para 11}

 As held by the Division Bench in Digambar Sakharam Tambolkar Vs. Pune Municipal Corporation and others 1987 Mh.L.J. 419, the expression "permission granted under this Act or any other law" is wide enough to cover all kinds of permission granted to develop land. A person aggrieved by any permission to develop land can always move the Planning Authority to revoke or modify such permission. Hence, it cannot be said that no remedy whatsoever is available to a person who seeks to revoke or modify such permission. For aforesaid reasons, said submission cannot be accepted.

13. The trial Court while deciding the preliminary issue as regards jurisdiction of the Civil Court has, therefore, rightly found that the Civil Court had no jurisdiction to go into the validity of permission granted by the planning authority as per the sanctioned plan. It has further rightly found that the Civil Court had jurisdiction to the extent of examining whether the construction carried out by the respondent Nos.1 to 3 was contrary to the sanctioned plan.

2015(6) ALL MR 108
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (NAGPUR BENCH)

A. S. CHANDURKAR, J.

Satish s/o. Gayacharan Trivedi Vs. Dr. Gopal Ramnarayan Mundhada & Ors.

Writ Petition No.3004 of 2014

18th April, 2015.

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Whether Civil court can entertain a suit against Municipal Corporation even if its jurisdiction is barred S 433A of the MMC Act?

 Now, Section 433A of the Maharashtra Municipal Corporations Act creating a bar of jurisdiction of the Civil Court, being relevant, is reproduced below :

"433A. Bar of jurisdiction - Save as otherwise provided in this Act, any notice issued, order passed or direction issued by the Designated Officer, under sections 260, 261, 264, 267 or 478 shall not be questioned in any suit or other legal proceedings."

Undoubtedly, if the plaintiff comes before the Civil Court alleging that a notice issued under Section 260 of the said Act is illegal in any manner and seeks a declaration to that effect, then the bar of jurisdiction to try such a suit under Section 433A of the said Act shall operate. However, nonetheless, the inherent jurisdiction of a Civil Court in a suit challenging the notice under Section 260 of the said Act, on the limited grounds, viz. that the act of issuance of such notice is nullity, or that while issuing such notice, the mandatory provisions of the said Act have not been complied with, or that the Authority issuing such a notice has not acted in conformity with the fundamental judicial procedure, or that it is an abuse of exercise of power, or that the offending act has not been done in good faith, remains intact, in view of the aforestated law laid down in judicial pronouncement. The Civil Court is not precluded of its inherent jurisdiction to entertain and decide such challenge to a notice under Section 260 of the said Act, on such limited grounds, particularly when there is no forum available under the said Act to ventilate such grievances in respect of it. {Para 7}

IN THE HIGH  COURT OF JUDICATURE AT BOMBAY(NAGPUR BENCH)

R.K. DESHPANDE, J.

The Commissioner, Akola Municipal Corporation Vs. Bhalchandra S/O. Govind Mahashabde

Civil Revision Application No. 14 of 2013

29th April, 2013

Citation:  2013 (4) MHLJ 45 Bom,2013(5) ALL MR 190

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Whether jurisdiction of civil court is barred as per S 149 of MRTP Act if dispute is arising out of terms and conditions of contract between parties?

 In the present case, the dispute between the parties is as to whether any permission was granted by the plaintiff to the defendants for the purpose of amalgamation of two plots or not and the plaintiff's specific case is that no such permission was given to the defendants either in the Development Agreement or in the Power of Attorney which was executed in their favour. The question which falls for consideration is as to whether the suit filed by the plaintiff can be tried in Civil Court or not. In order to appreciate the rival contentions, it would be necessary to examine relevant provisions. Section 149 of the M.R.T.P. Act, 1966 reads as under :-

"149. Finality of orders.- Save as otherwise expressly provided in this Act, every order passed or direction issued by the State Government or order passed or notice issued by any Regional Board, Planning Authority or Development Authority under this Act shall be final and shall not be questioned in any suit or other legal proceedings."

From the perusal of the said section, it is apparent that every order passed or direction issued by the State Government or order passed or notice issued by any Regional Board, Planning Authority or Development Authority under the Act shall be final and shall not be questioned in any suit or legal proceedings. The M.R.T.P. Act, 1966 empowers the Government to issue various orders or directions regarding numerous matters pertaining to either reservation or preparation of development plan etc. In my view, Civil Court's jurisdiction is ousted in respect of such matters where State Government or its authorities alone are empowered under the Act to adjudicate or decide any matter. In the present case, dispute is regarding the question as to whether the plaintiff had permitted the defendants to apply for amalgamation for the two plots or not. The dispute therefore is one which is arising out of the terms and conditions of the contract or the terms and conditions in the Power of Attorney which is executed by the plaintiff. In my view, therefore, bar of section 149 would not be applicable to the facts of the present case. 

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

V.M. KANADE, J.

M/S. Gadre Constructions & Ors.Vs.Sadashiv Keshav Sathe & Ors.

Civil Revision Application No.2213 of 2002

10th March, 2004

Citation: 2004(4) ALL MR 374,2004(4) Bom CR 596 Bom

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Whether civil suit is maintainable for quashing a deemed permission under S.45(5) of MRTP Act is maintainable?

 An appeal is therefore provided against the order granting permission or refusing permission under section 45. There is obviously no appeal against deemed permission under section 45(5) of the Act. The necessary corollary of this legal situation is that there can be a deemed permission under section 45(5) of the MRTP Act against which there is no appeal provided and there being no order made by any of the authorities there is no question of which acquiring finality as contemplated by section 149. Section 149 reads thus :{Para 11}

"149. Finality of orders.-

Save as otherwise expressly provided in this Act, every order passed or direction issued by the State Government or order passed or notice issued by any Regional Board, Planning Authority or Development Authority under this Act shall be final and shall not be questioned in any suit or other legal proceedings."

12. What is necessary under section 149 to acquire finality and invite the bar of civil suit is, it should be an order passed or direction issued by the State Government or it should be an order passed or notice issued by any Regional Board, Planning Authority or Development Authority under this Act. It is provided by this section that no such order shall be questioned in any suit or in any legal proceedings. It is obvious therefore that a suit or legal proceedings for quashing a deemed permission under section 45(5) is maintainable. Even otherwise under section 149 what is barred is questioning of an order made under the Act in the civil suit. It does not bar any suit whereby a party to it can be prevented from acting on an action and order made under the Act. The bar spelt out by section 149 is therefore very limited.

13. In our opinion therefore, the contention of Mr. V. V. Tulzapurkar that a civil suit is barred by reason of the provisions of section 149 of MRTP Act is unacceptable.

 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

V.G. PALSHIKAR AND P.V. KAKADE, JJ.

The Raja Bahadur Motilal Poona Mills Ltd. & Anr. Vs. State Of Maharashtra & Ors.

Writ Petition No.2591 of 2001

26th July, 2002

Citation: 2002(4) ALL MR 429,2003(1) BOM CR 251

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Whether Civil Court Can Declare Orders Passed Under Urban Land Ceiling Act As Illegal Or Non Est?

 The Urban Land (Ceiling and Regulation) Act, 1976 is a self-contained Code. Various provisions of the Act make it clear that if any orders are passed by the competent authority, there is provision for appeal, revision before the designated appellate and revisional authorities. In view of such remedies available for aggrieved parties, the jurisdiction of the civil courts to try suit relating to land which is subject-matter of ceiling proceedings, stands excluded by implication. Civil court cannot declare, orders passed by the authorities under the ULC Act, as illegal or non est. More so, when such orders have become final, no declaration could have been granted by the civil court. In this regard reference may be made to the judgment of this Court in the case of Competent Authority, Calcutta, under the Urban Land (Ceiling and Regulation) Act, 1976, (2020) 12 SCC 542. We are totally in agreement with the aforesaid view taken by this Court. {Para 14}

15. In this case, it is clear from the orders passed by the competent authorities, that the original declarant was holding excess land to the extent of 16000.32 square meters. When the orders passed by the competent authority and consequential notifications issued under Section 10(1) and 10(3) of the ULC Act have become final, it was not open for the respondent to file a suit seeking declaration, as prayed for. As we are of the view that jurisdiction of the civil courts is barred by necessary implication, trial court fell in error in entertaining the suit, as filed by the respondent and even the first appellate court and second appellate court have not considered the various grounds raised by the appellant in proper perspective.

Jurisdiction of civil courts to try suit relating to land which is subject matter of ceiling proceedings stands excluded by implication.

                          Supreme Court

JUSTICE R. SUBHASH REDDY JUSTICE HRISHIKESH ROY

State of M.P. Vs. Ghisilal

CIVIL APPEAL NO.2153 OF 2012

22nd November 2021

Author: R.SUBHASH REDDY, J.

Citation: 2021 ALL SCR (ONLINE) 677

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Can a civil court entertain a suit if the plaintiff is pleading fraud without material particulars if it is barred as per S 34 of the SARFAESI Act?

 Having considered the pleadings and averments in the suit more particularly the use of word ‘fraud’ even considering the case on behalf of the plaintiff, we find that the allegations of ‘fraud’ are made without any particulars and only with a view to get out of the bar under Section 34 of the SARFAESI Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the SARFAESI Act, which is not permissible at all and which cannot be approved.{ Para 8}

Supreme Court

JUSTICE M. R. SHAH JUSTICE SANJIV KHANNA

Electrosteel Castings Limited Vs. UV Asset Reconstruction Company Limited & Ors.

CIVIL APPEAL NO.6669 OF 2021

26th November 2021

Author: M. R. Shah, J.

Citation: 2021 ALL SCR (ONLINE) 697

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Whether civil court has jurisdiction to try suit for cancellation of construction permission granted by Municipal Corporation?

 Looking to the Court Fee clause of the suit as well as the prayers of the suit reproduced above, it is quite clear that the only relief sought is to cancel the construction permission given to Defendant No.3 and "in consequences of cancellation/suspension" of permission the mandatory injunction to remove structure and further perpetual injunction is claimed that Defendant No.3 should not do any construction at the suit property.

20. I have gone through the impugned order passed by the trial Court. Trial Court referred to the Rulings and in Para 22 of its order, in a cryptic manner observed that the plaintiff was seeking relief in respect of construction permission raising objections in respect of title and not considering the same by Corporation while granting construction permission. Trial Court then went on to observe that the question raised could be decided only by the Civil Court and observed that the Plaintiff is claiming the relief about the title which affects on the construction permission of the suit property. Thus only because plaintiff refers to his title, the trial Court has presumed that the suit was maintainable without seeing the substance of the Suit and prayer clauses and the fact that the suit did not at all claim declaration of title nor Court Fee was paid by the plaintiff. Thus, I find that the order passed by the trial Court is not maintainable.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY (AURANGABAD BENCH)

A. I. S. CHEEMA, J.

M/s. Arihant Construction Vs. Shri Subhash Kesharmal Barlota & Ors.

Civil Revision Application No.132 of 2014

20th March, 2015.

Citation: 2015(5) ALL MR 23

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Under which circumstances Civil court will have jurisdiction regarding wakf property?

 A combined reading of Sections 68(6), 86, 90 and 93 goes to show that the bar of jurisdiction under Section 85 does not apply at least to the following matters, covered by Sections 68(6), 86 and 90 :
(i) Whenever a District Magistrate passes an order directing the removed mutawalli or removed members of a Committee of Management to deliver possession of the records, accounts and properties of the waqf, to the successor or successor Committee of Management, any person claiming that he has right, title and interest in the properties specified in the order so passed by the Magistrate can approach a civil court;
(ii) The Board itself may approach a civil court either to set aside the sale in execution of a decree of civil court, of an immovable property which is a waqf property, or to set aside the transfer of any immovable property made by the mutawalli without the sanction of the Board or to recover possession of the property so sold or transferred, as the case may be;
(iii) The mutawalli is also empowered to approach the civil court to recover possession of any immovable property which is a waqf property, but which had been transferred by the previous mutawalli without the sanction of the Board (this is implicit in Section 86);

(iv) A waqf property can be brought to sale in execution of a decree of a civil court or for the recovery of any revenue, cess, rates or taxes due to the Government or any local authority, but such a proceeding will be void if no notice thereof is given to the Board [this is implicit in Sections 90(2) & (3)]. {Para 47}

 

Supreme Court

JUSTICE Hemant Gupta JUSTICE V. Ramasubramanian

RASHID WALI BEG Vs. FARID PINDARI & ORS.

Civil Appeal No. 6336 of 2021

28th October 2021

Author: V. Ramasubramanian, J.

Citation: 2021 ALL SCR (ONLINE) 608

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Whether civil suit is maintainable to challenge assessment and levy of property tax on immovable property?

 It will be noticed from the provisions contained in Section 9 of the Code of Civil Procedure that a bar to file a civil suit may be express or implied. An express bar is where a Statute itself contains a provision that the jurisdiction of a civil court is barred e.g., the bar contained in Section 293 of the Income Tax Act, 1961. An implied bar may arise when a Statute provide a special remedy to an aggrieved party like a right of appeal as contained in the Punjab Municipal Act which is the subject matter of the present case. Section 86 of the Act restrains a party from challenging assessment and levy of tax in any manner other than as provided under the Act. A provision like this is the implied bar envisaged in Section 9 C.P.C. against filing a civil suit.  {Para 7}
8. Munshi Ram and Others vs. Municipal Committee, Chheharta [1979 (3) SCR 463] was a case under the Punjab Municipal Act itself. The Court was considering the question of bar created under Sections 84 and 86 of the Act regarding hearing and determination of objections to levy of provisional tax under the Act. In this connection it was observed:
"From a conjoint reading of sections 84 and 86, it is plain that the Municipal Act, gives a special and particular remedy for the person aggrieved by an assessment of tax under the Act, irrespective of whether the grievance relates to the rate or quantum of tax or the principle of assessment. The Act further provides a particular forum and a specific mode of having this remedy which analogous to that provided in Section 66 (2) of the Indian Income-tax Act, 1922. Section 86 forbids in clear terms the person aggrieved by an assessment from seeking his remedy in any other forum or in any other manner than that provided in the Municipal Act.
It is well recognised that where a Revenue Statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking it are excluded.
Construed in the light of this principle, it is clear that sections 84 and 86 of the Municipal Act bar, by inevitable implication, the jurisdiction of the Civil Court where the grievance of the party relates to an assessment or the principle of assessment under this Act."
9. The Court upheld the objection regarding maintainability of the civil suit.
10. A Division Bench of the Delhi High Court in Sobha Singh & sons (P) Ltd. vs. New Delhi Municipal Committee [34 (1988) Delhi Law Times 91] had an occasion to consider the question of maintainability of a civil suit challenging the assessment and levy of property tax by the NDMC. Sections 84 and 86 of the Act came in for consideration. It was held that the provision of appeal contained in Section 84(1) of the Act provided a complete remedy to a party aggrieved against the assessment and levy of tax. Section 86 provides that the remedy of appeal is the only remedy to a party to challenge assessment for purposes of property tax. No other remedy was available to a party in such circumstances. It follows that the remedy of civil suit is barred.
11. In view of the aforesaid position in law, we are of the considered view that the civil suit filed by respondent challenging the assessment and demand of property tax by the appellant was clearly barred. 

SUPREME COURT OF INDIA

Brijesh Kumar J.Arun Kumar J.

N.D.M.C. Vs. Satish Chand(deceased by LR Ram Chand

Appeal (Civil) 2700 of 1997

11th September 2003

Citation:  2003 ALL SCR 313,2003(4) Maharashtra Law Reporter 331.

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Whether Jurisdiction of civil court is barred where the statute gives a finality to the orders of the special tribunals?

 In Dhulabhai v. State of Madhya Pradesh [AIR 1969 SC 78 : (1968) 3 SCR 662 : (1968) 22 STC 416] the position was similar to that in the two cases noticed above. Section 17 of the Madhya Bharat Sales Tax Act provided that no assessment made and no order passed under the Act or the Rules made thereunder shall be called in question in any Court. It was conceded by the State Government that the sales tax levied on the appellants was unconstitutional in view of Article 301 of the Constitution but it was contended that the civil court had no jurisdiction to entertain the appellants' suit for refund of the tax in view of Section 17 of the Act. After an examination of various decisions including those to which we have referred in this judgment Hidayatullah, J. who spoke for the Constitution Bench formulated seven propositions bearing on the construction of statutes which, expressly or by necessary implication, bar the jurisdiction of civil courts. It is unnecessary to examine each one of those propositions for the short reason that as in the case of Bharat Kala Bhandar and B.M. Lakhani, so in the case of Dhulabhai the recovery of sales tax was unconstitutional and the suit, for that reason, was held maintainable. Attention must, however, be drawn to propositions (1), (4) and (6). The first proposition states that 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. The fourth proposition is that when a provision is already declared unconstitutional or the constitutionality of any provision is to be challenged, a suit is open. The sixth proposition which bears more appropriately on the instant case says that 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. {Para 14}

Supreme Court of India

Bata Shoe Co vs City Of Jabalpur Corporation on 11 March, 1977

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When will the civil court have jurisdiction to entertain a suit relating to property tax?

  This makes it clear that the Act does not contemplate any valuation or assessment of any building for the liability to tax unless entry with regard to the same is made in the assessment list and the assessment list is prepared after following the prescribed procedure in sections 114 to 1 22 of the Act, issuance of the notice such as the one dated 23-10-1967 without being backed by the list of assessment required to be prepared cannot, in our opinion, create any legal liability to pay the tax. Imposition, levy and collection of taxes are three different stages. The power to collect tax does not come into existence merely by imposing the same. Liability to pay the tax can only arise, as is held in several cases of the highest Court, when the assessment list is prepared after giving the assesses enough opportunity to inspect the same and have their say in the matter. The procedure contemplated under the provisions of sections 114 to 122 furnishes some guarantee to the citizens against the excesses or arbitrariness of the officer to the assessee before the liability is imposed on them.

11. It is also difficult for us to attach any importance to the order dated 16-2-1968 on which reliance was placed by Mr. Deo because the same has not shown to have been passed after giving an opportunity to the plaintiff, respondent and secondly, because the same does not appear to have been based on any assessment list as such prepared after following the procedure prescribed under the Act. As indicated earlier, the plaintiff specifically pleaded in the plaint that assessment list was not prepared and not published and that his objections to the notice dated 23-10-1967 were not investigated in his presence, after giving an opportunity to him of hearing. The defendant could not produce any record at the trial to prove that, in fact any such hearing was given to the plaintiff.

13. On our finding it is difficult for us to hold that defendant's case is merely of an irregular exercising the power to tax preparation of the valid assessment list being the foundation of the debt of tax by the citizens to the Municipality. It is not enough that the Municipality possesses the power to impose the tax, but it must also legally levy tax and collect the same. Any lack of jurisdiction on the part of the Municipality in the matter of levy and collection is liable to be questioned in the Civil Court. As discussed earlier, it is difficult for us to hold that the calculation made in the bill amounted to valuation, assessment or levy under the provisions of the Act. No liability having arisen in the present case, the defendant was not legally entitled to recover any money from the plaintiff. The Civil Suit, therefore, in our opinion is perfectly maintainable and the bar of section 172 cannot arise in the present case. 

Bombay High Court

Municipal Council vs Shivaji Sindhi Co-Op. Hsg. ... on 15 April, 1980

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Whether civil suit challenging the valuation, assessment or levy, or liability of any person to be assessed or taxed for property tax is maintainable?

  In Bata Shoe Company's case, the Supreme Court, which was dealing with Section 84(3) of C.P. and Berar Municipalities Act, which is in pari materia with the provisions of Section 172 of the Maharashtra Municipalities Act, held that Section 84(3) of C.P. and Berar Municipalities Act expressly prohibits challenge to a valuation, assessment or levy, "in any other manner than provided in the Act" and since the Act has devised its own special machinery for enquiry into and adjudicating upon such challenges, the common remedy of a suit stands necessarily excluded and cannot be availed of by a person aggrieved by order of assessment to octroi duty. It was observed by the Supreme Court in this case that since the special machinery was devised for enquiry and adjudicating upon the duty of the tax, the common remedy of suit stands necessarily excluded and cannot be availed by a person aggrieved by the order of assessment. The octroi collected by Municipal Committee of Jabalpur on the goods imported by Bata Shoe Company was subsequently sought to be revised. It was revised and was paid by Bata Shoe Company and further, having paid such revised octroi duty, a suit was filed questioning the legality of refund or opening of the octroi already paid. It was held that the Municipal Committee had jurisdiction to reopen the cases to collect the tax. {Para 6}

7. The Supreme Court interpreted Section 84(3) of the C.P. and Berar Municipalities Act and held that such challenge to the valuation, assessment or levy could not be raised by filing a suit. It was observed by the Supreme Court that the decision of the Municipal Committee could not be said to be without jurisdiction. The case in Bharat Kala Bhandar Vs. Municipal Committee, Dhamangaon, reported in (1965)3 SCR 499 was distinguished by the Supreme Court, in which it was held that the action on the part of the Municipal Committee was unconstitutional. In Bharat Kala Bhandar's case, a suit was filed for recovery of excess tax paid by the plaintiff under Section 66(1)(b) of the Central Provinces Municipal Tax Act, 1922 on the ground that after coming into force of Section 142-A of the Government of India Act, 1935, till January 25, 1950, a tax in excess of Rs.50/- p.a. could not be imposed by the Municipal Committee. It was held in that case that the Municipal Committee had acted unconstitutionally as it was not entitled and it had no jurisdiction to collect tax in excess of Rs.50/-, as laid down under the provisions of Section 142 of the Government of India Act.

8. Thus, in Bata Shoe Company's case, the Supreme Court held that Section 84(3) of C.P. and Berar Municipalities Act expressly prohibited a challenge to the valuation, assessment or levy in any other manner than provided in the Act and since C.P. and Berar Municipalities Act has devised its own special machinery for enquiring into and adjudicating upon such challenges, the common remedy of a suit stood necessarily excluded and could not be availed of by person aggrieved by order of assessment. It was further held that Section 84(3) excluded expressly the power of any other authority than is provided in this Act to entertain an objection to any valuation, assessment or levy of octroi/tax. The provisions of Section 84(3) of C.P. and Berar Municipalities Act, as stated earlier, is in pari materia with Section 172 of the Maharashtra Municipalities Act and, therefore, the suit challenging valuation, assessment or levy of tax cannot be filed. The remedy provided under Section 169 of the Act i.e. filing of appeal before Magistrate and revision against the order of Magistrate will have to be availed of.

9. While deciding the aforesaid Bata Shoe Company's case, the Supreme Court did not disapprove the principles laid down in Bharat Kala Bhandar's case, wherein it was held that the act of the authority was unconstitutional and without jurisdiction, separate suit lay against it. In the case in hand, it is not the case of the plaintiff that the act of Municipality in imposing the tax was unconstitutional or without jurisdiction. On the contrary, the case of the original plaintiff was that the imposition of tax was exorbitant, unreasonable and that the procedure laid down under the Act was not followed. By applying the ratio laid down in Bata Shoe Company's case, this Court has, thereafter, in number of cases, held that the challenge to the procedure relating to the levy of any tax and assessment of the property for the purpose of tax amounts to challenge the assessment itself. When the plaintiff challenges the assessment on the basis that the provisions of the Act had not been correctly appreciated or followed and the tax was levied on the property without any basis, it is nothing but challenging to the assessment itself. It has been held by this Court in the case of Chief Officer, Sangamner Municipal Council Vs. Narayandas Jagannath Karwa (supra) that in such cases the bar under Section 172 of the Act will operate in respect of challenge to assessment on the ground of non-compliance of the Rules or of denial of principles of natural justice and of malice. This has been the consistent view of this Court. This Court, in Gandhi Agencies, Barshi Vs. Municipal Council, Barshi (supra), held that the suit for injunction seeking to restrain the Municipal Council from recovering octroi so as to include amounts allowed as discount in the invoice could only be challenged by way of appeal and revision and that jurisdiction of civil court to try suit is barred. This Court, by another judgment in the case of Ulhasnagar Municipal Council Vs. Arjun Kungooram Balani (supra), held that challenge to demand of Municipal for recovery of taxes by civil suit claiming declaration and injunction was barred under Section 172 of the Maharashtra Municipalities Act and that civil court had no jurisdiction. It was further held that the remedy lies by way of appeal under Section 169 of the Act before the Judicial Magistrate.

10. There is no dispute that in that case the plaintiff, who owned houses within the area of Municipal Council, Aurangabad, was issued with the bills in respect of the house, claiming consolidated property tax and that the original plaintiff, respondent herein challenged this saying that the tax was exorbitant, unreasonable and that the procedure laid down in the Act was not followed. It was never the case and was not shown that the Maharashtra Municipality Act was unconstitutional or without jurisdiction. What was stated was the procedure elapses and that could not be challenged in view of the Supreme Court's ruling in many cases, some of which have been cited in the foregoing paragraphs.

11. The defendant, in its written statement, had taken a plea of bar of civil suit. Both the courts below have erroneously held that the suit was not barred under Section 172 of the Maharashtra Municipalities Act. This Court, after careful consideration of the cases cited by learned counsel for the appellant, and for the reasons recorded in the foregoing paragraphs, holds that the civil suit challenging the valuation, assessment or levy or liability of any person to be assessed or taxed, cannot be questioned by filing suit and that it can be challenged in the manner provided in the Act itself.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY(AURANGABAD BENCH)

A.S. BAGGA, J.

Municipal Corporation, Aurangabad Vs. Shaikh Mohammed S/O. Shaikh Yusufsaheb

Second Appeal No.195 of 1984

5th March, 2004

Citation: 2004(3) ALL MR 532

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