REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   5242               OF 2008

[Arising out of SLP (C) No. 4351 of 2007]

M. K. Palia & Sons Pvt. Ltd. .. Appellant

Versus

Mumbai Municipal Corporation  

& Another ..

Respondents

J U D G M E N T

Dalveer Bhandari, J.

1. Leave granted.

2. This  appeal  is  directed  against  the  judgment  of  the

Bombay High Court dated 25.9.2006 passed in Writ Petition

No.1989 of 2006.   

3. Brief  facts  giving  rise  to  the  present  appeal  are

recapitulated as under:

The appellant is one of the 600 lessees of the Mumbai

Port Trust, who after a lapse of 23 years has challenged the

rateable value fixed by the Mumbai Municipal Corporation in

the year 1982.

4. There are 600 lessees and the appellant is one of them.

According to the learned counsel appearing for the respondent

Mumbai Municipal Corporation, 599 lessees have already paid

the  rateable  value  fixed  by  the  Mumbai  Municipal

Corporation.  The appellant has challenged the rateable value

fixed  in  the  year  1982  by  filing  a  complaint  in  November,

2005.   The  appellant  is  the  lessee  of  commercial  premises

admeasuring 845.70 sq. meter area i.e. 9048 sq. ft.

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5. Under Section 162 of the Mumbai Municipal Corporation

Act, 1888 (for short ‘the Act’), the Commissioner has to give

fifteen days notice from the date of publication of such notice

according to the scheme of the Act.   The notice  has to be

advertised  in  the  local  newspapers  and  published  in  the

Official  Gazette  and  complaints  against  the  amount  of  any

rateable value shall be entertained by the office.   

6. In order to properly comprehend the controversy in this

case, it is imperative to understand the scheme of the Act by

carefully perusing the provisions of the Act.

7. Section 156 of the Act deals with rateable value of each

such  building  and land  determined  in  accordance  with  the

provisions of the Act.   Section 156 of the Act reads as under:

“156.  Assessment  book  what  to  contain-  The Commissioner shall keep a book, to be called “the assessment  book”  which  shall  be  entered  every official year-

(a) a list of all buildings and lands in Brihan Mumbai  distinguishing  each  either  by name or number, as he shall think fit;

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(b) the rateable value of each such building and land determined in accordance with the foregoing provisions of this Act;

(c) the  name of  the  person  primarily  liable for the payment of the property taxes, if any,  leviable  on  each  such  building  or land;

(d) if any such building or land is not liable to  be  assessed  to  the  general  tax,  the reason of such non-liability;

(e) when the rates of the property-taxes to be levied for the year have been duly fixed by the  corporation and the  period  fixed by public notice, as hereinafter provided, for the receipt of complaints against the amount of rateable value entered in any portion  of  the  assessment-book,  has expired,  and  in  the  case  of  any  such entry which is complained against, when such complaint has been disposed of in accordance  with  the  provisions hereinafter  contained,  the  amount  at which  each building  or  land  entered  in such  portion  of  the  assessment-book  is assessed to each of the property-taxes, if any, leviable thereon;

(f) if under section 169, a charge is made for water supplied to any building or land by measurement  or  the  water  taxes  or charges  for  water  by  measurement  are compounded for, or if, under section 170, the sewerage  taxes  or sewerage charges for  any  building  or  land  are  fixed  at  a

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special rate, the particulars and amount of such charges, composition or rates;

(g) such  other  details,  if  any,  as  the Commissioner  from time  to  time  thinks fit to direct.”

8. Sections 160 and 162 of the Act read as under:

“160. Public  notice to be given when valuation of property in any ward has been completed. (1) When the entries required by clauses (a), (b), (c) and (d)  of  section 156 have been completed,  as far as practicable,  in  any  ward  assessment  book,  the Commissioner shall give public notice thereof and of the  place  where  the  ward  assessment-book,  or  a copy of it, may be inspected.   

(2) Such  public  notice  shall  be  given  by advertisement  in  the  Official  Gazette  and  in  the local newspapers, and also by posting placards in conspicuous places throughout the ward.

162.  Time  for  filing  complaints  against valuations to be publicly announced. (1) The Commissioner, shall at the time and in the manner prescribed  in  section  160,  give  public  notice  of  a day,  not  being  less  than  fifteen  days  from  the publication  of  such  notice,  on  or  before  which complaints  against  the  amount  of  any  rateable value entered in the ward assessment-book will be received in his office.

(2)  Special notice to be issued in certain cases.- In every case in which any premises have for the first time been entered in the assessment-book as liable to the payment of property rates or in which the  rateable  value  of  any premises  liable  to  such

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payment  has  been  increased,  the  Commissioner shall,  as  soon  as  conveniently  may  be  after  the issue of the public notice under sub-section (1), give a special written notice to the owner or occupier of the  said  premises  specifying  the  nature  of  such entry and informing him that any complaint against the same will be received in his office at any time within fifteen days from the service  of the special notice.”

9. Under section 164 of the Act, all complaints received by

the Commissioner are properly investigated and under Section

165  of  the  Act,  those  complaints  are  disposed  of  in  the

presence of the complainants.  Sections 164 and 165 of the

Act read as under:

“164.  Notice  to  complaints  of  day  fixed  for investigating  their  complaints.-  The Commissioner  shall  cause  all  complaints  so received to be registered in a book to be kept  for this purpose and shall give notice in writing to each complainant, of the day, time and place when and whereat his complaint will be investigated.

165. Hearing of complaint.- (1)  At  the  time  and place  so  fixed  the  Commissioner  shall  investigate and dispose of the complaint in the presence of the Complainant, if he shall appear, and, if not, in his absence.

(2) For reasonable cause, the Commissioner may from time to time adjourn the investigation.   

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(3) When the  complaint  is  disposed  of,  the result  thereof  shall  be  noted  in  the  book  of  the complaints  kept  under  section  164,  and  any necessary amendment shall be made in accordance with such result, in the assessment-book.”

10. Section  167  is  also  relevant  and  the  same  reads  as

under:

“167. Assessment-book may be amended by the Commissioner  during the official  year.-  (1)  The Commissioner may, upon the representation of any person concerned, or upon any other information, at  any  time  during  the  official  year  to  which  an assessment-book  relates  amend  the  same  by inserting  therein  the  name  of  any  person  whose name  ought  to  be  so  inserted  or  any  premises previously omitted or by striking out the name of any  person  not  liable  for  the  payment  of  any property  tax,  or  by  increasing  or  reducing  the amount of any rateable value and of the assessment based  thereupon,  or  by  making  of  cancelling  an entry exempting any premises from liability to any property-tax.

(2) Every such amendment shall be deemed to have been made, for the purpose of determining the liability or exemption of the person concerned in accordance with the altered entry, from the earliest day  in  the  current  official  year  when  the circumstances justifying the amendment existed.”

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11. According to the scheme of the Act, any person aggrieved

by  disposal  of  the  complaint  regarding  fixation  of  rateable

value can challenge the same by filing an appeal under section

217 of the Act.   

12. Section 217 of the Act reads as under:

217. Appeals when and to whom to lie. (1 Subject  to  the  provisions  hereinafter  contained, appeals against any rateable value or tax fixed or charged  under  this  Act  shall  be  heard  and determined by the Chief Justice of the Small Cause Court.

(2) But no such appeal by the Chief Judge of the Small Cause Court shall be entertained by the said Chief Judge, unless—

(a) it is brought within fifteen days after the accrual of the cause of complaint;

(b) in the case of  an appeal  against a rateable value a complaint has previously been made to the Commissioner under section 163 as such complaint has been disposed of;

(c) in the case of an appeal against any amendment  made  in  the  assessment  book under  section 167 during the official  year,  a complaint  has  been  made  by  the  person aggrieved  within  fifteen  days  after  the  first received  notice  of  such amendment,  and his complaint has been disposed of;

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(d) in the case of  an appeal  against a tax, or in the case of an appeal made against rateable value the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable  value, up to the date of filing of the appeal,  has  been  deposited  by  the  appellant with the Commissioner.

(3) In the case of any appeal entertained by the Chief Judge, but not heard by him before the date  of  commencement  of  the  Maharashtra Municipal Corporation (Amendment) Act, 1975, the Chief Judge shall not hear and decide such appeal unless the amount of the dispute tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, as the case may be, up to the date of filing the appeal, has been  deposited  by  the  appellant  with  the Commissioner  within thirty days from the date  of publication of a general notice by the Commissioner in  this  behalf  in  the  local  newspapers.   The Commissioner  shall  simultaneously  serve  on each such appellant a notice under section 484 and 485 and  other  relevant  provisions  of  this  Act,  for intimating  the  amount  to  be  deposited  by  the appellant with him.

(4) As  far  as  possible,  within  fifteen  days from  the  expiry  of  the  period  of  thirty  days prescribed under sub-section (3) the Commissioner shall  intimate  to  the  Chief  Judge  the  names  and other  particulars  of  the  appellants  who  have deposited with him the required amount within the prescribed  period  and  the  names  and  other particulars  of  the  appellants  who  have  not deposited  with  him  such  amount  within  such period.   On receipt  of  such  intimation,  the  Chief Judge  shall  summarily  dismiss  the appeal  of  any

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appellant  who  has  not  deposited  the  required amount  with  the  Commissioner  within  the prescribed period.  

(5) In  the  case  of  any  appeal  against  any rateable  value  or  property  tax  fixed  or  charged under this Act, which may have been entertained by Chief  Judge  before  the commencement  of  the Act aforesaid, or which may be entertained by him after the said date, the Chief Judge shall not hear and decide such appeal unless the property tax, if any, payable on the basis of the original rateable value plus eighty  per centum  of the property tax claimed from the appellant on the increased portion of the rateable  value  of  the property  out  of  the property tax claimed under each of the bills, which may have been issued, from time to time, since the Filing of appeal,  is  also  deposited  with  the  Commissioner within the period prescribed under the Act.  In case of default of the appellant, on getting an intimation to that effect  from the Commissioner, at any time before the appeal is decided, the Chief Judge shall summarily dismiss the appeal:

Provided that in case the appeal is decided in favour  of  the  Corporation,  interest  at  6.25  per centum per annum shall be payable by the applicant on the balance amount of the property tax from the date  on  which  the  amount  of  property  tax  was payable:

Provided  further  that,  in  case  the  appeal  is decided in favour of the appellant and the amount of  property  tax  deposited  with  the  Corporation  is more  than  the  property  tax  payable  by  him,  the Commissioner  shall  adjust  the  excess  amount  of the property tax with interest at 6.25 per centum per annum  from  the  date  on  which  the  amount  is

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deposited  with  the  Corporation  towards  the property taxes payable thereafter.”

13. The entire scheme of challenging the rateable value has

been  fixed  by  the  Corporation.  There  is  also  a  statutory

provision  of  filing  an  appeal  after  the  complaint  has  been

decided by the concerned authority.

14. In  the  instant  case,  the  appellant  has approached  the

court  regarding  fixation  of  rateable  value  by  filing  a  writ

petition after a lapse of 23 years.  The other 599 lessees of the

building  have  already  paid  the  rateable  value  fixed  by  the

respondent  Corporation.   Even  the  appellant  has  also

regularly  paid  rateable  value  fixed  by  the  Corporation  till

1999.  

15. In the impugned judgment of the Division Bench of the

High Court dated 25.9.2006, it has been rightly observed that

there  seems to be  no justification of  approaching the  court

after a lapse of 23 years.  

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16. Faced  with  this  situation,  the  learned  counsel  for  the

appellant tried to take shelter of the judgment of this Court in

Jamshed Hormusji  Wadia v. Board of  Trustees,  Port  of

Mumbai & Another (2004)  3 SCC 214.   We have carefully

perused this judgment.  It does not help the appellant at all.

The submission of the appellant that they are entitled to seek

review of the rateable value on the basis of Wadia’s judgment

(supra) is totally devoid of any merit.    

17. Nine-Judge Bench of this court in  Mafatlal Industries

Ltd. & Others v. Union of India & Others (1997) 5 SCC 536

held that “once assessment or levy became final in case of a

manufacturer–assessee,  he  cannot  later  file  suit  or  writ

petition claiming refund on the ground that decision of  the

court or tribunal in another person’s case led him to discover

the mistake of law under which he paid the duty”.  

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18. The High Court correctly observed that it was not a case

of unjust enrichment made under the mistake of law by the

respondent.    

19. In  pursuance  to  the  notice  issued  by  this  court,  the

Assistant  Assessor  and  Collector  of  Mumbai  Municipal

Corporation  has  filed  a  detailed  counter  affidavit.   It  was

submitted  that the appellant  has not  only failed to file  any

complaint  in  the  year  1984  or  in  the  subsequent  years

challenging the increase in the rateable  value but also paid

the taxes on the basis of increase in rateable value without

any demur or protest.    Regarding increase  in the  rateable

value,  by  no  stretch  of  imagination,  it  can  be  said  to  be

excessive, disproportionate or contrary to the provisions of the

Act.  The appellant is carrying on commercial activities in the

prominent area of Mumbai and cannot be permitted not to pay

a reasonable rateable value of the premises.

20. In the counter affidavit, it is also incorporated that the

rateable  value  of  the  property  was increased  in accordance

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with law in the year 1984-85 on account of the increase in the

lease rent by the Mumbai Port Trust.  The appellant has paid

the taxes as per rateable value fixed by the Corporation upto

the  year  1999  and  the  same  has  attained  finality  under

section  219  of  the  Act  and  cannot  be  re-opened  with

retrospective effect.   

21. Section 219 deals with unappealed value and taxes and

decisions on appeal to be final and the same reads as under:

“219. Unappealed values and taxes and decisions to appeal to be final.- (1) Every rateable value fixed under this Act against which no complaint is made as hereinbefore provided, and

the  amount  of  every  sum claimed  from any person under this Act on account of any tax, if no appeal therefrom is made as hereinbefore provided, and

the decision of the Chief Judge aforesaid upon any  appeal  against  any  such  value  or  tax,  if  no appeal is made therefrom under section 218D, shall be final.

(2) Effect shall be given by the Commissioner to  every  decision  of  the  said  Chief  Judge  on any appeal against any such value or tax.”

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22. It was submitted by the respondent that in view of the

aforesaid  provisions  it  is  not  within  the  powers  of  the

Commissioner or the respondent to reopen the assessment or

make  any  alternation  in  the  assessment  done  with

retrospective effect.

23. Though  it  was  not  necessary  to  examine  the  detailed

averments  of  the  complaint,  however,  in  order  to  satisfy

ourselves that there is no injustice done to the appellant, we

have also looked into the facts of this case.  The appellant’s

property No. 2797(1) being used for commercial purpose was

assessed  on  31st March,  1961  at  the  rateable  value  of

Rs.20,100/-  per annum.  The premises was assessed as land

with C.I. Shed having an area of 2860 sq. ft. assessed at the

rate of Rs.8/- per brass and remaining land for storage was

assessed at the estimated rent of Rs.1,766/-.  The property

was, therefore, assessed at a rateable value of Rs.20,100/- per

annum with effect from 31.3.1961. The rateable value of the

property was revised to Rs.25,645/- in the year 1984-85 on

account  of  increase  in  rent  by the owner.   There  has been

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increase  of  Rs.5,545/-  in the  rateable  value  after  about  23

years, which cannot be said to be exorbitant by any stretch of

imagination.   It  may  be  pertinent  to  mention  that  rateable

value  for  2006-07  is  still  Rs.25,645/-.  The  appellant

continued to pay increased rateable value without any demur

till  1999.   The  complaint  for  the  first  time  was  filed  on

12.11.2005.

24. It  is incorporated  that the appellant  has,  however,  not

paid  property  tax  from the  year  2000  till  December,  2007.

The total amount of Rs.5,86,185/- is outstanding by way of

taxes  an  amount  of  Rs.64,216/-  by  way  of  penalty  and

Rs.750/-  towards  fees  for  notice  of  demand.    Admittedly,

these amounts have not been paid by the appellant.

25. We do not want the appellant to get undue  advantage

over all other 599 lessees, who have been regularly paying the

taxes  within  the  prescribed  time.  The  appellant  by  filing  a

frivolous petition should not get unjust advantage over other

lessees,  therefore,  we direct  the  appellant  to pay the  entire

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outstanding amount with 10% interest per annum from the

date when the amount became due and payable  along with

penalty and the fees towards notice of demand being charged

by the respondent.   In case the amount is not paid by the

appellant  within  two  months  time,  then  respondent  no.  1

would be entitled to get 15% interest on the outstanding taxes

from the date when it becomes due and payable and would

also be at liberty to take appropriate steps in accordance with

law.

26. This  appeal,  being  devoid  of  any  merit,  is  accordingly

dismissed with costs.

..….….……………………..J.   (Dalveer Bhandari)

……….……………………..J.   (Harjit Singh Bedi)

New Delhi; August 26, 2008.

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