Corpn. of Delhi Vs. C.L. Batra  INSC 423 (10 August 1994)
S.C. (J) Sen, S.C. (J) Jeevan Reddy, B.P. (J)
1994 SCC (5) 355 JT 1994 (5) 241 1994 SCALE (3)719
Judgment of the Court was delivered by SEN, J.- This appeal arises out of an
interim order of stay passed by a Single Judge of the Delhi High Court dated 16-12-1993 in Suit No. 1851 of 1993. This suit was filed by the
plaintiff, C.L. Batra, after the previous attempt to obtain interim order of
stay failed on a writ petition (Civil Writ Petition No. 583 of 1992), which was
dismissed as withdrawn on 27-2-1992.
grievance of the appellant, Municipal Corporation of Delhi, is that an interim order has been
passed in this suit by which the assessee has obtained stay of recovery of tax
of nearly one crore of rupees. The assessee was directed to deposit the
admitted liability of Rs 3,00,000 only in respect of the property, M/s Grindlay Cinema Building, New Friends Colony, New Delhi.
interim order was extended from time to time. The last of such extension was
granted on 16-12-1993 in Suit No. 1851 of 1993.
the Judgment and Order dated 16-12-1993 of
the Delhi High Court in Suit No. 1851 of 1993 356 4.The grievance of the
appellant is that this interim order has opened a floodgate and many other
suits have been filed bypassing the statutory provisions of appeal. Stay orders
have been obtained in respect of demands totaling about rupees twenty crores.
The case of the appellant is that the assessments have been completed in
accordance with law. Copies of the assessment orders have been annexed to the
special leave petition.
behalf of the assessee, it has been contended that an authenticated assessment
list is a condition precedent to any recovery proceeding. In the instant case,
there is no such list in existence. Therefore, no recovery proceedings can be
commenced. It has been pointed out that written statement filed on behalf of
the Municipal Corporation was found inadequate and the written statement had to
be amended. This necessitated the extension of the interim order. In the
background of these facts, it cannot be said that the suit is not maintainable
or the recovery proceedings should not be stayed.
our view, no interim order should have been passed in this case at all for
it has not been satisfactorily explained why the statutory remedyof appeal was
allowed to be bypassed. The trial Judge was conscious of this aspect of the
matter and the judgment of the Delhi High Court in an earlier case. In fact, he
has recorded in his order dated 9-9-1993 this fact:
am conscious of the order passed by the Division Bench of this Hon'ble Court in
Abaskar Construction Pvt. Ltd. decided on 30- 9-1991." There is no explanation
why even after this he entertained the suit and passed the interim order.
the assessee had filed a writ petition, praying for similar relief. When
interim order was not granted on that writ petition, he withdrew the writ
petition and filed this suit. This was an abuse of process of law.
liberty was obtained from the court to file a suit on the same cause of action,
when the writ petition was withdrawn.
Thirdly, as early as on 6-1-1984, in the case of Siliguri Municipality v. Amalendu
Das' this Court had vacated an interim order staying recovery of tax. In that
case, it was pointed out: (SCC p. 438, para 3) "The Court has to show
awareness of the fact that in a case like the present a Municipality cannot
function or meet its financial obligations if its source of revenue is blocked
by an interim order restraining the Municipality from recovering the taxes as
per the impugned provision. And that the Municipality has to maintain essential
civic services like wafer supply, street lighting and public streets etc.,
apart from, running public institutions like schools, dispensaries, libraries
etc. what is more, supplies have to be purchased and salaries have to be paid.
The grant of an interlocutory order of this nature would paralyse the
administration and dislocate the entire working of the Municipality. It seems
that these 1 (1984) 2 SCC 436:1984 SCC (Tax) 133: (1984) 2 SCR 344 357 serious
ramifications of the matter were lost sight of while making the impugned
order." 10.In the case of Assistant Collector of Central Excise, Chandan Nagar,
W.B. v. Dunlop India Ltd.2, it was held that interim orders were not to be
granted in revenue matters merely because a prima facie case had been shown. It
was also emphasised in that case that even assuming that the assessee had
established a prima facie case, it was not a sufficient justification for
granting the interim orders.
observed: (SCC p. 264, para 3) "It is only where statutory remedies are
entirely ill-suited to meet the demands of extraordinary situations, as for
instance where the very vires of the statute is in question or where private or
public wrongs are so inextricably mixed up and the prevention of public injury
and the vindication of public justice require it that recourse may be had to
Article 226 of the Constitution. But the Court must also have good and
sufficient reason to bypass the alternative remedy provided by statute, Surely
matters involving the revenue where statutory remedies are available are not
the instant case, there is no question of constitutional invalidity of any
provision of law. In fact, in the case of Shyam Kishore v. Municipal Corpn. of
Delhi3, this Court held Section 170(b) of the Delhi Municipal Corporation Act
was intra vires and the District Judge had no jurisdiction to waive the
condition of deposit or stay the collection of tax, pending disposal of the
appeal in the court. It was, however, pointed out that the District Judge had
the power to adjourn the hearing of the appeal or pass interim orders enabling
the assessee to pay up the taxes before the appeal was actually heard and
determined. But, this power had to be exercised judicially bearing in mind the
interests of revenue and the, position of the cases before him.
order dated 29-9-1993 and the subsequent orders that were
passed, indicate that the Single Judge of the Delhi High Court had lost sight
of the aforesaid considerations and interim orders were passed. In fact, the
first interim order passed on 28-9-1993 was
to the following effect:
"28-9-1993 Present:Mr R.P. Sharma for the plaintiff, Mr P.C.
Jain, Sr. Clerk in the Law Office of the defendant in person.
7136 in S. 1851 of 1993 Mr P.C. Jain, Senior Clerk in Law Office of the
defendant is present in court in response to the notice issued to the MCD.
is sought to respond to the notice. The response be filed regarding
maintainability of the, suit within a week. Response,should be filed in each of
(1985) 1 SCC 260: 1985 SCC (Tax) 75: (1985) 2 SCR 190 3 (1993) 1 SCC 22: JT
(1992) 5 SC 335 358 Till the next date of hearing there shall be no recovery
proceedings. The admitted amount however be paid.
of the plaint, application, annexures and the documents relied upon be given to
Mr Jain today itself.
for 18-11-1993." No ground was indicated for
passing the interim order staying recovery of tax. The order was passed even
without deciding the question of maintainability of the civil suit.
interim order has been extended from time to time.
Having regard to the law, which is now well-settled, we fail to say how an
interim order of stay of realisation of tax could be passed in a case like
this. Under these circumstances, we set aside the interim orders under
challenge. The Delhi Municipal Corporation will be at liberty to recover the
The appeal is allowed. There will be no order as to costs.