Delhi High Court
Lakhmi Chand vs Municipal Corporation Of Delhi
P.K. Bahri, J.
1. The only question which arises in this second appeal against the judgment and decree dated September 13, 1972, of Shri H. K. S. Malik, Senior Sub-judge, is as to what is the period of limitation prescribed for recovery of arrears of house tax due to the Municipal corporation of Delhi ?
2. Vide letter dated February 14, 1968, the Assistant Assessor and Collector (Recovery Cell) of the Municipal Corporation of Delhi had required the appellant to pay a sum of Rs. 19,558.75 as arrears of house tax due in respect of property No. 3432-35/III, Ganda Nala, Mori Gate, Delhi, calculated up to the period ending March 31, 1967. It was mentioned in the said notice that in case the arrears of house tax are not paid on or before February 22, 1968, the same shall be recovered by the execution of distress warrant along with 20% penalty. This demand was challenged by the appellant by filing a civil suit on February 21, 1968, seeking perpetual injunction against the respondent-Corporation. The appellant challenged the said demand on the ground that this particular property was an evacuee property earlier and had vested in the Custodian and the appellant became the owner of the said property with effect from September 29, 1966, when a sale deed was executed and registered in his favor by the Government and thus he was not liable for payment of house tax for the period prior to his becoming owner of the property and, secondly, that in any case the demand raised by the Municipal Corporation of Delhi was barred by limitation and thus the appellant was not liable to pay arrears of house tax beyond the period of three years.
3. The Municipal Corporation of Delhi contested the suit besides taking certain preliminary objections regarding maintainability of the suit on account of the provisions of sections 477 and 478 of the Act. The plea was taken that the demand raised by the Corporation was legal and the arrears of house tax claimed in the said demand were not barred by limitation and the recovery could be effected from the appellant who is the owner of the property and the house tax is the first charge on the property in question. In the replication, the appellant reiterated his pleas and the following issues were framed :
(1) Whether the impugned demand notice dated February 14, 1968, of the defendant is illegal and unenforceable against the plaintiff ?
4. The plaintiff-appellant appeared in the witness box and made his statement proving the notice of demand, exhibit P-1, on the record and deposed that he had deposited the house tax due from him for the periods 1966-67 and 1967-68 and he was not liable to pay the arrears of house tax mentioned in the demand notice. He admitted in the cross-examination that he was in provisional possession of the property in question much earlier to the issuance of the sale certificate in his favor by the Government. In rebuttal, a clerk from the house tax department appeared as DW-1 and he proved on record exhibits D-1 and D-2, copies of the extracts from the demand and collection register which show the period from which the house tax arrears have been calculated. DW-2, a clerk from the office of the Regional Settlement Commissioner, appeared in the witness box and deposed that provisional possession had been given to the plaintiff-appellant with effect from November 25, 1957. Vide judgment dated February 26, 1970, Shri Mohinder Singh, Sub-judge, gave a finding that the demand raised by the Municipal Corporation of Delhi is covered by article 113 of the Limitation Act, 1963. As the demand was barred by limitation, the Municipal Corporation of Delhi cannot recover house tax for a period prior to February 21, 1965. SO, he granted injunction restraining the Municipal Corporation of Delhi from recovering the arrears of house tax for the period prior to February 21, 1965. The matter was taken up in appeal by the Corporation and Shri H. K. S. Malik, Senior Sub-judge, vide the impugned judgment, held that no period of limitation is fixed for recovery of arrears of house tax by the Municipal Corporation of Delhi and much arrears of house tax could be recovered by a distress warrant and he placed reliance on Municipal Corporation, Delhi v. Balkishan Das  RLR (N) 95 (wrongly mentioned as Note 92 in the judgment). He also placed reliance on an unreported judgment in R. S. A. No. 102 of 1968, Mittar Sain v. Municipal Corporation of Delhi. As far as the facts are concerned, they are not now in dispute before me. Counsel for the appellant frankly stated at the Bar that the sale deed which had been issued in favor of the appellant-plaintiff clearly mentioned that the property in question had been transferred to the plaintiff-appellant with effect from November 25, 1957, and a photo copy of the sale deed has been produced by him during the course of the arguments which has been placed on the record. So, the legal position is clear that the plaintiff-appellant became the owner of this property with effect from November 25, 1957. Exhibit D-2 clearly shows that the arrears of house tax claimed in the demand notice are of the period after the plaintiff-appellant had become the owner of this property. So, the contention raised that certain arrears of house tax pertained to the period when the Central Government was owner of the property is now not available to the appellant.
5. The only point which needs decision is as to what period of limitation applies to the claim of the Municipal Corporation of Delhi in respect of the arrears of house tax. Section 123 of the Delhi Municipal Corporation Act, 1957, makes it clear that the property taxes are the first charge on the premises on which they are levied. Article 62 of the Limitation Act lays down the period of 12 years to enforce payment of money secured by a mortgage or otherwise charged upon immovable property. Although in the case of Balkishan Das  RLR (N) 95, Prithvi Raj J. had laid down the law that in respect of the house tax to be realised by distress warrant, there is no period of limitation applicable, yet even if one is to differ with this ratio, then these house tax arrears could be recovered within a period of 12 years in view of article 62 of the Limitation Act.
6. It has been argued by learned counsel for the appellant that the residuary article 113 which prescribes a period of three years should be applicable to recover arrears of house tax. But he has not been able to show as to why article 62 is not applicable when the statute clearly makes the house tax levied on a particular property as the first charge on that property. The matter is not res integra because similar provisions appearing in the Bombay District Municipal Act, 1901, have been construed in Shidrao Narayanrao Gumaste Patil v. Municipality of Athni, AIR 1943 Bom 21, and it was held that arrears of house tax being the first charge on the immovable property are governed by article 132 of the old Limitation Act, the corresponding article in the new Limitation Act being admittedly article 62. Earlier in Mt. Badrunnissa v. Municipal Board, Agra , similar provisions existing in the U. P. Municipality Act, 1916, came up for consideration and again it was held that such a demand for arrears of house tax which is a charge on the immovable property is covered by article 132 of the old Limitation Act. Counsel for the appellant had made a reference to Kalu Ram v. New Delhi Municipal Committee  2 DLT 526, which has dealt with the question with regard to recovery of damages for use and occupation recoverable under section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act and where it was held that only arrears which are not barred by limitation could be recovered. There is no dispute about this proposition of law. Our High Court has followed this in New Delhi Municipal Committee v. Jhangi Ram  RLR (N) 34. The Supreme Court in New Delhi Municipal Committee v. Kalu Ram, , has also laid down the same proposition of law that the demand must not be barred by limitation before it could be given effect to. However, the question as to what particular article of the Limitation Act applies to the demand in question was not the subject-matter of decision in these cases.
7. Reference was made to Municipal Corporation of Delhi v. Palace Cinema, 2nd  1 Delhi 163 [FB]. This case pertained to recovery of advertisement tax and it was held that article 120 of the old Limitation Act which is a residuary article would cover such a demand. Obviously, the advertisement tax is not a charge on the property. Hence, in the absence of any specific article of limitation applicable to such demand, it was rightly held by a Full Bench of this court that such a demand would be covered by the residuary article.
8. So, in view Of the above discussion, I hold that article 62 Of the new Limitation Act is applicable to the demand in question and thus the same was not barred by limitation when it was made. Hence, the appellant could not possibly succeed in this appeal I need not express any view with regard to the correctness or otherwise Of the ratio laid down in the Case of Balkishan Das  RLR (N) 95. I find no merit in this appeal which I hereby dismiss with costs.