Whether failure to give public notice vitiated entire proceedings of levy of municipal property tax?

Shri Naik, learned counsel appearing on behalf of the Municipal Corporation, submitted that both the authorities below were in error in holding that the failure to give public notice under Rule 13 vitiated the entire proceedings of levy of rateable value. The learned counsel submitted that the conclusion of the two authorities below that public notice under Rule 13 is mandatory is incorrect. We find considerable merit in the submission of the learned counsel. As mentioned hereinabove, the determination of rateable value in respect of the properties of the company was undertaken for the first time after the area of village Kumathe was included within the limits of Municipal Corporation. As rateable value was determined for the first time, it was incumbent upon the Corporatioin to follow taxation rules set out in Chapter VIII of the Schedule to the Act. It is not in dispute that the Commissioner had published a notice under sub-rule (1) of Rule 15 to enable the owners of the property including company to lodge a complaint against the amount of rateable value entered into assessment book. It is also not in dispute that the special notice contemplated under sub-rule (2) of Rule 15 was served on the company and the premises of the company were assessed for property tax on the first occasion and the rate of tax was more than a tax which the company was paying to the village panchayat. The sole grievance of the company is that the entire procedure of levy of rateable value and recovery of tax was vitiated for failure to strictly comply with the requirement of sub-rule (1) of Rule 13.

In our judgment, the two authorities below were clearly in error in proceeding to strike down the exercise carried out by the Corporation to levy property tax on assumption that the requirements of sub-rule (1) of Rule 13 are mandatory. The plain reading of the sub-rule makes it clear that after the entries required to be made by clauses (a), (b), (c) and (d) of Rule 9 have been completed, the Commissioner shall give public notice thereof and of the place where the ward assessment-book may be inspected. The public notice contemplated under this sub-rule is to give notice to the owners of various properties that an assessment book prepared under Rule 9 is available for inspection at a particular place. The public notice is required to be given by advertisement in the local newspapers and also by posting placards in conspicuous places. The two authorities below proceeded to hold that the requirement of giving public notice is mandatory because of the use of expression 'shall'. The conclusion reached by the authorities below is clearly erroneous. It is now well settled by catena of decisions of the Supreme Court and this Court that whether.

the provision is mandatory or directory is not dependent upon the use of expression 'shall' or 'may'. What is required to be ascertained is the purpose or the object of the rule and whether any breach in following the rule affects substantial right of the person concerned. Applying this well settled test, it is obvious that the requirement of giving public notice under Rule 13 cannot be held to be mandatory. The object of giving public notice is informing the owners of buildings or land about the preparation of assessment-book under Rule 9 and to enable the property owners to inspect the same if so desired. There is no obligation cast upon the property owners to inspect the same because the failure to do so does not result into any consequences adversely affecting the owners. The rule is merely an enabling one and the Commissioner is required to give public notice only to inform the owners about the preparation of assessment-book. In our judgment, the rule cannot be held to be a mandatory one and it is obviously directory one and consequently, the breach thereof cannot vitiate the entire process of assessment of rateable value. In this connection, it would be appropriate to distinguish between the provisions of Rule 13 and Rule 15. Rule 15 also demands that the Commissioner shall give a public notice and this notice is to be given to the property owners to enable them to lodge complaints against the amount of rateable value. Sub-rule (2) of Rule 15 demands the Commissioner to serve special notice in case the rateable value is increased. The failure to give public notice under Rule 15(1) or special notice under sub-rule (2) of Rule 15 clearly affects the right of a property owner to lodge complaint and in that case the requirement of public notice has to be treated as mandatory. In our judgment, the two authorities below overlooked the object and the purpose of Rule 13 and erroneously proceeded to conclude that requirements of Rule 13 are mandatory because of the use of the expression 'shall'. The decision of the two authorities below holding that the entire process of determination of rateable value is null and void for failure to give notice contemplated under Rule 13, therefore cannot be sustained. It would not be out of place to state that the failure to give public notice under Rule 13 has in no manner adversely affected the interest of the company. The learned counel for the company very fairly stated that notice under sub-rule (2) of Rule 15 was served and consequently the company, did lodge complain! against the amount of rateable value. In these circumstances, the exercise undertaken by the Corporation in determining rateable value in respect of properties which were originally situated within village Kumathe and which were subsequently included within the city limits of Corporation cannot be faulted with.

Bombay High Court

The Solapur Municipal ... vs Shivaji Works Ltd. on 21 April, 1992

Equivalent citations: AIR 1993 Bom 213, 1993 (1) MhLj 80

Bench: M Pendse, B Wahane

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What are conspicuous places for pasting of public Notice?

The Apex Court dealt with a very interesting question as to what is a conspicuous place for posting of a Public Notice under land acquisition law which if not read might affect rights of several persons. It has held that Office of the Collector, Panchayat Office, Office of Tehsildar, Office of municipality, railway station and bus stand, etc. of the local area are public places and are expected to be visited by general public, so they can safely be assumed as conspicuous places for making a declaration under an Act.

The Bench comprising of Justices Sudhanshu Jyoti Mukhopadhaya and Vikramajit Sen allowed the appeal filed by Karnataka State whereby it has upheld the provision of Section 9 of the Karnataka Municipalities Act, 1961 and the notification issued in reference to that.

The brief facts are that the Government of Karnataka initially proposed to alter the existing limits of Town Municipal Council, Sedam for inclusion of Survey No. 630-642 within the municipal limits of town municipality. It invited objections and suggestions to the proposal from persons likely to be affected therein.  It then notified that having received no objection from persons likely to be affected within the said period of 30 days from the date of publication of notification, Governor of Karnataka specified the smaller urban area and further specified it to be called Town Municipal Council Area of Sedam.

The case of the 1^st respondent was that the notice has to be posted in area sought to be added or deleted in smaller urban areas, but it was not posted in the area of his factory which is a large area of around 1235.03 acres and is an inhabited area with housing for workmen, management, etc and has mini townships. It has not even been posted in any other area sought to be included.

The appellant  while  assailing the  impugned  judgment,  submitted  that  the  procedure  prescribed  under Section 9 of the Act is substantially followed and  complied  with  in  this case and notice had posted announcing the inclusion of the  local  area  within  the existing municipal  limits  in  all  the  conspicuous  places,  calling  for objection from the public within 90 days but  no  objections  were  received within the time stipulated.

Court held that Section 9 of the Act has to be read in the light of  Article  243Q  of the Constitution of India and that the Provision of Section 9 is somewhat similar to  Section  4  of  the Land  Acquisition  Act,  1894  where under  the  posting  of  the  notice  in conspicuous/convenient places is mandatory.

It held that if the argument advanced by the 1^st respondent is accepted, in that case every affected  person  whose  land  is sought to be included for the purpose of alteration of  the  limits  of  the smaller urban area would claim that such notice must be posted in his land. That the notice was posted in the Office of the Collector, Panchayat Office, Office of Tehsildar, Office of  municipality, railway station and bus stand,  etc. of  the  local area which are  public places and are expected to be visited by general  public for one or the other reason and can  be  safely  expected  to  be conspicuous/convenient places for posting  a  notice  about  such a declaration. If notice was posted within the township of 1st respondent, then other affected persons might not have any access to such notice, as posted not on a  public  place.  In such case, every individual/affected persons will claim posting of such notice at their land which will amount to giving individual notice to all affected persons.

The judgment undeclaredly goes hand in hand with the relative criminal law jurisprudence for posting of wanted posters for proclaimed offenders, history sheeters etc at public places. Such places have to be chosen tactfully so that more views are recorded in less time. In land acquisition jurisprudence, for such public notices, even more caution needs to be taken care of as it involves huge amount of money and basic rights of citizens at large are involved. This also dates back to the doctrine of individual responsibility for collective conscience under common law designed to address issues for public at large.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1918 OF 2015
(Arising out of SLP(C) No.30573 2012)
STATE OF KARNATAKA TR.
SEC. HSG. & URB. & ANR.
... APPELLANTS
VERSUS
VASAVADATTA CEMENT & ANOTHER
Dated;FEBRUARY 16, 2015.

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