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CASE NO.: Appeal (civil)  2700 of 1997

PETITIONER: N.D.M.C.                                                         

RESPONDENT: Satish Chand(deceased) by LR Ram Chand   

DATE OF JUDGMENT: 11/09/2003

BENCH: Brijesh Kumar & Arun Kumar.                                       

JUDGMENT: JUDGMENT

ARUN KUMAR, J.

       The question for consideration in this appeal is  regarding maintainability of a civil suit to challenge  assessment and levy of property tax on a property owned by   Respondent.  Respondent owns a basement in Property  No.33, Prithvi Raj Road, New Delhi.  The appellant is a  statutory body responsible for discharging civic functions in  specified areas in the city of Delhi.  To generate revenue for  itself the appellant is authorized to levy taxes including  property tax.  The said property was assessed to property  tax by the appellant.  According to respondent the basement  cannot be put to use because it gets filled up with sub-soil  water.   For this reason the respondent claimed that the  basement could not be said to be having any annual  rateable value and therefore it could not be assessed to  property tax and no tax could be levied.  Inspite of this, the  appellant assessed the said property to property tax.  It was  further alleged by the respondent that objections filed by him  against the assessment of the said property to property tax  had been rejected by the appellant and a notice of demand  had been sent regarding arrears of property tax. This  demand included arrears for certain earlier period even  though the same had been stayed by civil court in separate  proceedings.  Respondent filed a suit for permanent  injunction stating that the action of the appellant in  assessment of the said property to property tax and  demanding arrears of tax amounting to Rs.4,293.35 (Rupees  Four thousand two hundred ninety three and paise thirty five)   on this account was illegal and without jurisdiction.  He made  a prayer for a permanent injunction restraining the appellant  from recovering the said amount.         The appellant took a preliminary objection against the  maintainability of the said suit.  The objection is based on  Sections 84 and 86 of the Punjab Municipal Act, 1911  (hereinafter referred to as "the Act").   The NDMC at the  relevant time was constituted under the said Act and  assessment and levy of property tax was a function carried  on by NDMC in accordance with the provision of the said  Act.  Sections 84 and 86 of the said Act are reproduced as  under: "84.    Appeals against taxation-(1) An appeal  against the assessment or levy of any or against the  refusal to refund any tax under this Act shall lie to  the Deputy Commissioner or to such other officer as  may be empowered by the State Government in this  behalf:

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Provided that, when the Deputy  Commissioner or such other officer as aforesaid, is,  or was when the tax was imposed, a member of the  committee, the appeal shall lie to the Commissioner  of the division.

(2) If, on the hearing of an appeal under the section,  any question as to the liability to, or the principle of  assessment of, a tax arises, on which the officer  hearing the appeal entertains reasonable doubt, he  may, either of his own motion or on the application  of any person interested, draw up a statement of the  facts of the case and the point on which doubt is  entertained, and refer the statement with his own  opinion on the point for the decision of the High  Court.

(3)     On a reference being made under sub-  section (2), the subsequent proceedings in this case  shall be, as nearly as may be, in conformity with the  rules relating to references to the High Court  contained in Section 113 and Order XLVI of the  Code of Civil Procedure.

(4) In every appeal the costs shall be in the  discretion of the officer deciding the appeal.

(5) Costs awarded under this section to the  committee shall be recoverable by the committee as  though they were arrears of a tax due from the  appellant.

(6) If the committee fail to pay any costs awarded to  an appellant within ten days after the date of the  order for payment thereof, the officer awarding the  costs may order the person having the custody of  the balance of the municipal fund to pay the  amount.

86. Taxation not to be questioned except under this  Act-(1) No objection shall be taken to any valuation  or assessment, nor shall the liability of any person  to be assessed or taxed be questioned, in any other  manner or by any other authority than is provided in  this Act.

(2) No refund of any tax shall be claimable by any  person otherwise than in accordance with the  provisions of this Act and the rules thereunder."

       Section 84 contains a provision regarding appeals  against assessment and levy of taxes which means that a  remedy of a statutory appeal is provided to a party aggrieved  of assessment and levy of tax under the Act.  When a Statute  provides a remedy of appeal it is a remedy governed by the  Statute and has to be exercised strictly in accordance with  the statutory provisions.  Section 86 contains a bar against  challenge to any valuation or assessment for purposes of tax  including property tax except in accordance with remedy  contained in the Act itself.  Section 86 further debars any  person from questioning the liability towards tax based on  assessment by the authorities under the Act by any manner  other than what is provided in the Act itself.  Thus Section 86  of the Act contains a total bar against availing any remedy

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against assessment and or levy of tax except as per the  provision of the Act itself.  On the basis of these provisions  contained in the Act it was pleaded on behalf of the appellant  that the suit was not maintainable and was therefore liable to  dismissed.  The trial court upheld the objection regarding  maintainability of the suit and the suit was accordingly  dismissed.  However, appeal against said judgment was  allowed by the Senior Civil Judge.  On the question of  maintainability of the suit, the lower appellate court by  distinguishing the relevant judicial pronouncements on the  issue, came to a conclusion that the suit was maintainable.   The High Court dismissed the second appeal in limine.  This  has led to filing of the present appeal.         We have heard the learned counsel for the parties at  length.  In our view the legal position on the question of  maintainability of civil suits in such matters is fairly well  settled.  Section 9 of the Code of Civil Procedure contains a  provision regarding right of a party to file a civil suit.  The  same is reproduced as under: "9. Courts to try all civil suits unless barred- The  Courts shall (subject to the provisions herein  contained) have jurisdiction to try all suits of a civil  nature excepting suits of which their cognizance is  either expressly or impliedly barred.

Explanation I - A suit in which the right to property or  to an office is contested is a suit of a civil nature,  notwithstanding that such right may depend entirely  on the decision of questions as to religious rites or  ceremonies.

Explanation II â\200\223 For the purposes of this section, it is  immaterial whether or not any fees are attached to  the office referred to in Explanation I or whether or  not such office is attached to a particular place."

       The opening words of the section give a very wide  jurisdiction to the civil courts to try all suits of a civil nature  however, this wide power is qualified by providing an  exception i.e. "excepting suits of which their cognizance is  either expressly or impliedly barred."  Dhulabhai etc. vs.  State of Madhya Pradesh & Others [AIR 1969 SC 78] is a  celebrated judgment on the point which still holds the field.   It lays down the following principles: "(1) 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 court 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.

(2) Where there is an express bar of the jurisdiction  of the court, an examination of the scheme of the  particular Act to find the adequacy or the sufficiency  of the remedies provided may be relevant but is not  decisive to sustain the jurisdiction of the civil court.  Where there is no express exclusion the  examination of the remedies and the scheme of the  particular Act to find out the intendment becomes  necessary and the result of the inquiry may be  decisive.  In the latter case it is necessary to see if

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the statute creates a special right or a liability and  provides for the determination of the right or liability  and further lays down that all questions about the  said right and liability shall be determined by the  tribunals so constituted, and whether remedies  normally associated with actions in civil courts are  prescribed by the said statute or not.

(3) Challenge to the provisions of the particular Act  as ultra vires cannot be brought before Tribunals  constituted under that Act.  Even the High Court  cannot go into that question on a revision or  reference from the decision of the Tribunals.

(4) When a provision is already declared  unconstitutional or the constitutionality of any  provision is to be challenged, a suit is open.  A writ  of certiorari may include a direction for refund if the  claim is clearly within the time prescribed by the  Limitation Act but it is not a compulsory remedy to  replace a suit.

(5) Where the particular Act contains no machinery  for refund of tax collected in excess of constitutional  limits or illegally collected, a suit lies.

(6) 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.

(7) An exclusion of the jurisdiction of the Civil Court  is not readily to be inferred unless the conditions  above set down apply."           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.  In Raja Ram Kumar Bhargava (dead) by LRs  vs. Union of India [ AIR 1988 SC 752] this Court observed: "Generally speaking, the broad guiding  considerations are that wherever a right, not pre- existing, in common-law, is created by a statute and  that statute itself provided a machinery for the  enforcement of the right, both the right and the  remedy having been created uno flatu and a finality  is intended to the result of the statutory  proceedings, then, even in the absence of an  exclusionary provision the Civil Courts’ jurisdiction is  impliedly barred. If, however, a right pre-existing in  common law is recognised by the Statute and a new  statutory remedy for its enforcement provided,

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without expressly excluding the Civil Court’s  jurisdiction, then both the common-law and the  statutory remedies might become concurrent  remedies leaving upon an element of election to the  persons of inherence.  To what extent, and on what  areas and under what circumstances and  conditions, the Civil Courts’ jurisdiction is preserved  even where there is an express clause excluding  their jurisdiction, are considered in Dhulabhai’s  case."

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."

The Court upheld the objection regarding maintainability of  the civil suit.         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.         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

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the appellant was clearly barred.  The judgments of the  lower appellate court and the High Court are, therefore, set  aside and the judgment of the trial court is hereby restored.    The civil suit filed by respondent is dismissed as not  maintainable.  The appeal is allowed.   There will be no  order as to costs.