SRIKANT KASHINATH JITURI AND ORS.versusCORPORATION OF THE CITY OF BELGAUM

A               SRIKANT KASH!NATH JITURI AND ORS.
                               v.
               CORPORATION OF THE CITY OF BELGAUM

                               OCTOBER 5, 1994

B          [M.N. VENKATACHALIAH, CJ, AM. AHMADI AND
                      B.P. JEEVAN REDDY, JJ.]

          Kamataka Municipal Corporation Act, 1976 :

C        Sections 108, 109, 117, 147 and 148-Schedule III-Part ~Taxation
    Rules-Rules 2, 5 to 8, 18 to 20, 22 and 25.

          Property T~evision of-Assessees filing representative suit before a
    Civil Court impugning tax enhancement instead of filing appeal as provided
    under Rules alleging arbitrary enhancement of tax and pressure on assessors
D   to increase tax and inspection and measurement of houses without prior
    notice-Held on such allegations suit is not maintainable-Jurisdiction of
    Civil Court held ousted.

          Property Tax-Method of determination of on the basis of fair rent
    alone regardless of actual rent-Whether sound.
E
          Civil Procedure Code, 1908: Section 9.

          Civil Coult-Exclusion of jurisdiction-Principles relating to-What are.

          The respondent-Corporation revised the property tax in 1984. The
F appellants questioned the said revision by filing a representative suit,
  instead of filing an appeal as provided under Rule 18 of the Karnataka
  Municipal Corporations Act, 1976, pleading that (i) enhancement in the
  property.tax was arbitrary, imreasonable and illegal; (ii) since the property
  tax is determined on the basis of fair rent, there cannot be any increase of
  tax inasmuch as no alterations have been effected in any of the houses;
G (iii) the assessors inspected and measured the houses without prior notice
  to owners; and (iv) the assessors were pressurised to increase the property
  tax. The Trial Court dismissed the suit holding that it was not main-
  tainable in Civil Court by virtue of Rule 25. The appellate Court took a
  contrary view holding that the suit was maintainable. The High Court
H reversed the decision of the first appellate court holding that the suit was
                                       262
                         S.K. JITURl v. CbRPN.                            263

not maintainable.                                                                A
       In appeal to this Court it was contended on behalf of the appellants
that the suit was maintainable because (I) the remedy of appeal was not
efficacious because the right of second appeal was coupled with an onerous
condition of depositing the entire property tax; (ii) if a writ petition is
maintainable without filing the second appeal provided by Rule 20, a snit        B
is eqnally maintainable.

      Dismissing the appeal, this Court

       HELD : 1. The present snit, on the allegations contained in the plaint    C
itself - let alone the findings of the Court - is not maintainable in a Civil
Conrt. None of the gromids on which an assessment made under the
Karnataka Act can be challenged in a civil court, Is even alleged In the
plaint. There is no allegation that there bas been a non-compliance with·
any of the provisions of the statute let alone non-compliance with any of
the fundamental provisions of the statute. No reasons are given as to why        D
the appellant did not file appeals before the Taxation Appeals Committee.
All that is complained of is that the enhancement of tax is excessive. That
by itself is not enough. Similarly, the allegation that enhancement is
arbitrary or .nnreasonable is per se ·not SJlfficlent to over-ride the eipress
statutory bar. The High Conrt was, therefore, right in holding that the said     E
snit is not maintainable In Civil Court. [268-G, H, 266-H, 268-H, 269-A)

     Dhulabhai and Ors. v. The State of Madhya Pradesh andAnr., [1968]
3 S.C.R. 662 and Shiv Kumar Chadha v. Municipal Corporation of Delhi,
[1993) 3 S.C.C. 161, relied on.
                                                                                 F
       2. An onerous provision may be a ground for entertaining a writ
petition on the ground that the alternative remedy provided by the statute
is not an adequate or efficacious r•medy but that can never be a ground
for maintaining a civil snit. Both the jurisdictions are different and are
governed by different principles. Article 226 provides a consititutional         G
remedy. It confers the power of judicial review on High Courts. The finality
clause in a statute is not a bar to the exercise of this constitntion!'I power
whereas the jurisdiction of a civil court arises from another statute viz.,
Section 9 of the Code of Civil Procedure. In such a case, the bar arising
from an express provision like Rule 25 or arising by necessary intendment
can be over-ridden only in cases and situations which are judicially recog-      H
    264                    SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.

A nised. The jurisdiction of the Civil Court in such matters is governed by
    the recognlswl principles. Therefore, it is not correct to say that whatever
    is good for Article 226 is good for suit as well. [269-D to FJ

             Himmat Lal Hari/al Mehta v. State of Madhya Pradesh, (1954) S.C.
    403, referred to.
B
             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4745 of
    1991.

         From the Judgment and order dated 3.1.91 of the Karnataka High
    Court in Misc. Second Appeal No. 141 of 1987.
c
         V.M. Tarkunde, B.D. Sharma, Narottam Das and K.K. Gogna for the
    Appellants.

             G. Viswanatha Iyer, A.S. Bhasme and A. Raghunath for the Respon-
    dents.
D
             The Judgment of the Court was delivered by

           B.P. JEEVAN REDDY, J. In this appeal preferred against the judg-
    ment of the Karnataka High Court, the question that arises is whether the
    suit filed by the appellants in the civil court questioning the revision of
E   property tax in the year 1984 is not barred by virtue of Rule 25 contained
    in Part-I of Schedue-III of the Karnataka Municipal Corporations Act,
    1976? The suit was initially instituted by three persons. While plaintiffs 1
    and 3 are two of the house-owners within Belgaum Municipal Corporation,
    the second plaintiff is an Association of house-owners within the said
F   corporation limits. Subsequently, fourteen other individuals owning houses
    within the said corporation limits joined as plaintiffs. The relief asked for
    in the plaint is for a declaration that the revision of property tax effected
    by the defendant Corporation in the year 1984 is arbitrary, unreasonable
    and illegal and should not be enforced against the owners of the houses in
G   Belgaum. The trial Court dismissed the suit as not maintainable in Civil
    Court by virtue of Rule 25 aforesaid. On appeal, however, the first Appel-
    late Court took a contrary view. It held that the suit is maintainable and,
    accordingly, remitted the matter to the trial Court for disposal on merits.
    The order of the Appellate Judge was questioned by the Municipal Cor-
    poration by way of miscellaneous civil appeal which has been allowed by a
H   learned single Judge of the High Court.
              S.K. JITIJRI v. CORPN. [JEEVAN REDDY, J.]                  265

      Sub-section 2 of Section 108 of the Karnataka Municipal Corpora-          A
tions Act, 1976 provides for levy of property tax. It fixes a certain ceiling
beyond which the tax cannot be levied. Sub-section 3 provides that for the
purposes of assessing the property tax, the rateable value of any building
or land shall be determined by the Commissioner. Section 109 prescribes
the method of assessment of property tax. It also prescribes the method in      B
which the rateable value of a building or land shall be determined. Section
117 empowers the Commissioner to ask for any information, and also to
enter upon premises for the purpose of collecting information, to enable
him to make a proper assessment. Section 147 says that the rules and tables
embodied in Schedule-III shall be read as part of Chapter X (Chapter X
deals with the levy of property tax and its assessment among other matters).    C
Section 148 provides that the Corporation shall revise any tax imposed by
it once in every five years or whenever such enhancement is found neces-
sary.

         Schedule-III contains the taxation rules. The rules provide for the D
 Commissioner preparing and keeping assessment books containing neces-
 sary particulars which shall be open for inspection by the tax-payers (Rule
 I). It is for the Commissioner to determine the tax to which each property
 or person is liable (Rule 2). The assessment books shall have to be
 completely revised by the Commissioner once in every five years and an
assessment once made shall continue until it is revised (Rules 5 and 6). E
Rule 7 prescribes the procedure when assessment books are prepared for
the first time or whenever a general revision of the books is completed. It
provides for giving a public notice containing the prescribed particulars.
 Rule 8 says that the Commissioner may after giving notice to the parties
concerned and after hearing the objections, if any, amend the books by F
making the necessary amendments and alterations. Any person aggrieved
by the assessment of property tax is entitled to file an appeal before the
Taxation Appeals Committee (Rule 18). A second appeal lies to District
Court as provided by Rule 20 .. There is, however, a condition attached to
this right of second appeal, viz., that the tax is to be paid within the period G
prescribed. Rule 19 confers a suo-moto power of revision on the Divisional
Commissioner of the Revenue Division to be exercised in cases where any
assessment or an order is prejudicial to the interests of revenues of the
Corporation. Rule 22 empowers the District Court to state a question of
law for the opinion of the High Court in an appropriate case. Rule 25 then
says that "subject to any order of the District Court or the Divisional H
    266                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A Commissioner or the decision of the Taxation Appeals Committee or the
    orders passed by the Commissioner, the assessment or demand of any tax
    shall be final."

           In the present case, the property tax was revised earlier in the year
    1979. After a lapse of five years, the impugned revision was made. The
B   plaintiffs did not file the appeal as provided by the rules but came forward
    with this representative suit. We shall now notice the allegations in the
    plaint to determine whether the said allegations bring the suit within the
    purview of the Civil Court notwithstanding the bar contained in Rule 25.
    The main allegations of the plaintiffs are that the valuation of the proper-
C   ties within the Corporation limits has risen from Rs. 2.5 crores in 1979 to
    Rs. 9 crores in 1984 and that the tax has gone up from Rs. 50 lakhs per
    annuam to Rs. 1.8 crores per annum. This enhancement is termed as
    arbitrary, unreasonable and illegal. It is stated that the enhancement in
    some cases is 10 to 20 times times or more. It is submitted that according
D   to the decisions of this Court, property tax must be determined on the basis
    of fair rent and, therefore, there cannot be any increase of property tax
    from 1979 to 1984 since no additions or alterations have been effected to
    any house in the Corporation limits. Plaintiffs also complain that the
     assessors inspected the houses and took measurements of the plinth area
     of the buildings, without giving prior notice to the owners. The measure-
E    ments so taken stealthily, they said, cannot form the basis of revision of
     property tax. The plaintiffs alleged that according to their information the
     assessors were pressurised to increases the property tax to the maximum
     extent, i.e., at least by four to five times over the existing tax.

F         The allegation that between 1979 and 1984, no alterations or addi-
    tions have been effected and the further ambiguous assertion that the
    assessors were pressurised to enhance the taxes by 4 to 5 times are too
    general and sweeping to merit any· constideration. It is not also alleged who
    pressurised the assessors.

G         These are all the allegations in the plaint. It is apparent that there is
    no allegation that there has been a non-compliance with any of the
    provisions of the statute let alone non-compliance with any of the fun-
    damental provisions of the statute. No reasons are given as to why they did
    not file appeals before the Taxation Appeals Committee. It is also not
H   stated why they could not have urged the grounds now taken in the plaint
             S.K.JITURI v. CORPN. [JEEVANREDDY,J.]                       267
in appeals. The only reason stated for approaching the Civil Court is that A
if appeals have to be filed, their number would be in thousands and that it
is uot a practicable proposition.

      The principles relating to jurisdiction of Civil Court in the case of
acts and orders taken under special enactments is well-known. After
considering several Indian and English cases, Hidayatullah, CJ, had stated B
the relevant principles in Dhulahhai and Ors. v. The State of Madhya
Pradesh and Anr., [1968) 3 S.C.R. 662 in the following words :

        "(1) Where the statute gives a finality to the orders of the special
        tribunals the Civil Courts' jurisdiction must be held to be excluded C
        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. D

        (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
        ~t.                                                                     E
           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 the statute F
       creates a special right or a liability and provides for the determina-
       tion 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 G
       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.                        H
    268                   SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.

A           (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.

B           (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
c           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.

D           (7) An exclusion of the jurisdiction of the Civil Court is not readily
            to be inferred unlesr the conditions above set down appl~.'

          This Court further clarified that non-compliance with the P,~visions
    of the statute meant non-compliance with such fundamental provisions of
    the statute as would make the entire proceedings before the appropriate
E
    authority illegal and without jurisdiction. The Court also stressed the
    relevance and significance of the machinery provided by the relevant
    special statute for rectifying any errors and the irregularities.

          The principles enunciated in this decision have since been followed
F   uniformly in various decisions, the last of which is in Shiv Kumar Chadha
    v. Municipal Corporation of Delhi, [1993] 3 S.C.C. 161, where again the
    entire case law on the subject has been reviewed and principles reaffirmed.

           Applying the above principles, it must be held that the present suit,
    on the allegations contained in the plaint itself - let alone the findings of
G   the Court - is not maintainable in a Civil Court. None of the grounds on
    which an assessment made under the Karnataka Act can be challenged in
    a civil court, is even alleged in the plaint, as pointed out hereinbefore. In
    other words, none of the grounds indicated in Dhulabha~ upon which such
    an assessment can be questioned is alleged in the plaint. All that is
H   complained of is that the enhancement is excessive. That by itself is not
             S.IUITURI v. CORPN. [JEEVANREDDY,J.]                        269

enough. Similarly, the allegation that enhancement is arbitrary or un- A
reasonable is per se not sufficient to over-ride the express statutory bar.
The High Court was, therefore, right in holding that the said suit is not
maintainable in Civil Court.

       Sri Tarkunde, the learned counsel for the appellants submitted that      B
inasmuch as the right of second appeal to the District Court is coupled
with an onerous condition, viz., deposit of the entire property tax - neither
the appellate authority nor any other authority, it is stated, is empowered
to relax that condition, either partly or wholly, whtever be the' circumstan-
ces - the said remedy of appeal cannot be called an adequate or efficacious
remedy. For this reason, the learned counsel submitted, the suit is main-       C
tainable. Learned counsel contended that if a writ petition is maintainable
without filing the second appeal provided by Rule 20, a suit is equally
maintainable. In our opinion, the said contention is based upon a miscon-
ception. Such an onerous provision may be a ground for entertaining a writ
petition on the ground that the alternative remedy provided by the statute      D
is not an adequate or efficacious remedy see Himmat Lal Harilal Mehta v.
State of Madhya Pradesh, AIR (1954) S. C. 403 but that can never be a
ground for maintaining a civil suit. Both the jurisdictions are different and
are governed by different principles. Article 226 provides a constitutional
remedy. It confers the power of judicial review on High Courts. The finality
clause in a statute is not a bar to the exercise of this constitutional power   E
whereas the jurisdiction of a civil court arises from another statute, viz.,
Section 9 of the Code of Civil Procedure. In such a case, the bar arising
from an express provision like Rule 25 or arising by necessary intendment
can be over-ridden only in cases and situations pointed out in Dhulabhai.
The jurisdiction of the Civil Court in such matters is governed by the          F
principles aforestated and the ground now urged by Sri Tarkunde is not
one of the grounds recognised for invoking the jurisdiction of the Civil
Court. It is not correct to say that whatever is good for Article 226 is good
for suit as well.

   • Before parting with this appeal, we feel compelled to express our          G
doubts as to the soundness and continuing relevance of the view taken by
this Court in several earlier decisions that the property tax must be deter-
mined on the basis of fair rent alone regardless of the actual rent received.
Fair rent very often means the rent prevailing prior to 1950 with some
minor modifications and additions. Property tax is the main source of           H
    270                  SUPREME COURT REPORTS (1994) SUPP. 4 S.C.R.

A revenue to the municipalities and municipal corporations. To compel these
  local bodies to levy and collect the property tax on the basis of fair rent
  alone, while asking them at the same time to perform all their obligatory
  and discretiOnary functions prescribed by the statute may be to ask for the
  impossible. The cost of maintaining and laying roads, drains and other
  amenities, the salaries of staff and wages of employees - in short, all types
B of expenditure has gone up steeply over the last more than forty years. In
  such a situation, insistence upon levy of property tax on the basis of fair
  rent alone - disregarding the actual rent received - is neither justified nor
  practicable. None of the enactments says so expressly. The said principle
  has been evolved by Courts by a process of interpretation. Probably a time
C has come when the said principle may have to be reviewed. In this case,
  however, this question does not arise at this stage and, therefore, it is not
  necessary to express a final opinion on the said issue.

          The appeal accordingly fails and is dismissed. No costs.

    T.N.A.                                                  Appeal dismissed.