Jute Machineries Co. Ltd Vs. Candlewood Holdings Ltd. & Ors  Insc 989
(28 September 2007)
Arijit Pasayat & Lokehwar Singh Panta
APPEAL NOS.5670-5671OF 2000 Dr. ARIJIT PASAYAT, J.
Challenge in these appeals is to the order passed by a Division Bench of the
Calcutta High Court in an appeal which was directed against the order of the
learned Single Judge dated 23.3.2000. By the said order, the learned Single
Judge in that application for execution appointed Receiver for realization of
commercial charges and consolidated rates and taxes in terms of prayer (e) of
column 10 of the tabular statement. The order was passed on 9.2.2000 wherein it
was recorded in terms of earlier order dated 18.5.1999 that the judgment debtor
did not pay any instalment and in that view the decree dated 13.10.1982 had
become executable. The second order dated 9.2.2000 was not challenged in any
proceedings. The application was made by the tabular statement before the
learned Single Judge for execution of the decree dated 13.10.1982. The said
decree was passed by consent of the parties and parties filed their terms of
settlement in the Court on the basis of which the said consent decree was made.
The decree was subsequently modified by consent of parties by order dated
26.4.1990 and subsequently the decree was transferred by the then decree-holder
in favour of the applicant-respondent for execution proceedings. The execution
proceedings were related to recovery of the immovable property and money on
account of rates, taxes and commercial surcharge levied by the Municipal
Corporation of Calcutta (in short 'Corporation') under the Municipal
Corporation Act, 1980 (in short the 'Corporation Act') which operated
prospectively from 4.1.1984. An order was made in terms of prayer (b) of the
tabular statement on the earlier occasion and also in terms of prayer (f) as
recorded in the order dated 2.9.2000. By another order dated 30.3.2000
application was rejected.
Stand of the appellant was that the learned Single Judge was incorrect in
passing the order directing execution by way of appointment of Receiver since
the commercial surcharge is not payable according to Corporation Act and the
consolidated rates and taxes are determined by the Corporation. Stand before
the High Court was that since no rate had been produced and it was not so as
determined by the Corporation, there is no question of paying any amount by way
of surcharge. It was urged that the Corporation Act envisages one consolidated
rate bill payable by the owner which is recoverable by the owner from the
occupier. It was urged that the earlier order dated 10.3.1999 as well as the
order of the Division Bench did not consider this aspect. Therefore, it was
submitted that the application should not have been disposed of under Section
47 of Code of Civil Procedure, 1908 (in short 'CPC').
Stand of the respondents, on the other hand, was that there was no dispute with
regard to amount payable and the appellant had in fact paid the amount. The
question was considered by the earlier Division Bench by an order dated
18.5.1999. The order was challenged before this Court by SLP which was not
accepted. Reference was also made to a letter dated 10.12.1999, which clearly
indicated the liability for commercial surcharge. The Division Bench considered
the respective stand. It was noted that the claim can be divided into two
parts. One part of the claim is from 1976 upto 4.1.1984, when the Corporation
Act came into force and the second portion of the claim is subsequent to coming
into operation of the said Act.
far as the first portion is concerned, there was no argument on behalf of the
appellant. It was not explained as to what would be its stand for non-payment
of the dues prior to the operation of the Act. It was, however, submitted by
the appellant that under law prevalent at the relevant time, the rate bill
should have been presented to the occupier for payment and since there was no
such presentation, the question of non-payment does not arise. The High Court
did not accept this stand with reference to the consent decree. The High Court
also did not accept this stand that after the Corporation Act came into
operation, there was one consolidated rate bill and amount was not determined
and the primary obligation "Owner to pay and thereafter recover from
appellant", and as such the appellant is not liable. It was noted that it
all along made payment in terms of clause 7 of the terms of the settlement
before the High Court on the basis of which the consent decree was passed.
There was no dispute with regard to the amount raised at any point of time.
Division Bench also did not find any relevance of the fact that letter dated
10.12.1999 was issued under the heading "without prejudice". The High
Court was of the view that it is clear from the letter that there was no
dispute with regard to the amount and the expression "without
prejudice" referred to any other contention that could have been raised by
the appellant. Since the appellant was paying the amount without any dispute,
the stands raised were not acceptable. In the earlier round also, the Division
Bench noted this stand which was indicated in the memorandum of appeal and SLP
before this Court was withdrawn. The appeal was accordingly dismissed.
support of the appeals, it has been contended as follows:
Commercial surcharge only becomes payable after the same is determined by the
Corporation. Since that has not been done and there is no assessment and no
demand by the Corporation, the question of any liability does not arise.
Commercial surcharge payable under the Act since 4.1.1984 and the same is not
the consent decree, clause (vii) is of considerable relevance in the present
dispute. The same reads as follows:
defendant further undertakes and agrees to punctually and regularly pay
commercial surcharge on consolidated rates @ 50% of the amount of corporation
tax or at such rate as Municipal Corporation of Calcutta may determine as and
when the same is determined and becomes payable and the defendant shall keep
the plaintiff or person claiming through the plaintiff fully discharged and
Reference also needs to be made to letter dated 10.12.1999. The said reads as
Candlewood Holdings Limited, 24, Park Street, CALCUTTA 700 016.
Sir, Sub: Payment of Rent for the month of October, 1999 without prejudice.
please find the four Manager's Cheque No. 056083, 056084, 056085, 056086 dated
09.12.99 payable at UCO Bank, Free School Street Branch for Rs.1,53,182/- on
account of Rent Payable for October, 1999. The amount in the Cheque is arrived
Rs.1,26,943.00 Corporation Tax Rs. 46,270.84 Commercial Surcharge @ 50% of Corpn.
23,135.44 Rs.1,96,349.00 Less: 1. Tax 20% on Rs.1,26,943.50 =Rs. 25,389.00 2. Surcharge
10% on I.Tax.
2,539.00 ============= Rs. 27,928.00 Rs.1,68,421.78 Less: Arrear I.Tax and
I.Tax and surcharge since April, 1999 to Sept. 99 =Rs.1,67,568.00 Less:
Deducted during earlier Said months =Rs.1,52,328.00 ---------------------- Net
15,240.00 --------------------- Rs.1,53,181.78 --------------------- With best
regards, Yours faithfully, For THE LAGAN JUTE MACHINERY CO. LTD.
B.B. CHAKRABORTY SUPERVISOR (Cashier) Encl: As above."
this juncture, it would be appropriate to take note of what was stated in Kamlabai
and Ors. v. Mangilal Dulichand Mantri (1987 (4) SCC 585), it was noted as
The next question which is of some importance is about raising of the
objections at the earlier stage. Admittedly when the award was filed in the
court, notice was served and no objection was raised. If the tenant intended to
raise the objection that this decree on the basis of the award could not be
passed as it was in contravention of Clause 13 of the Rent Act and therefore
was absolutely without jurisdiction, such an objection could have been raised
there and then. The tenant admittedly did not raise this objection which was
open to him. In this view of the matter, the contention on behalf of the
appellant about the constructive res judicata also is of some significance.
This question of constructive res judicata in execution proceedings came before
this Court in Mohanlal Goenka v. Benoy Krishna Mukherjee. In this decision
following the earlier decision of the Privy Council, this Court ruled that the
principles of constructive res judicata will be applicable even in execution
is also clear that when the decree was passed on the basis of award and notice
was issued to the judgment-debtor respondent no such objection was raised. It
is also clear that the decree was put in execution on more than one occasions
and this objection was for the first time raised only in 1983. In this view of
the matter also the contention of the learned counsel for the appellant that by
not raising this objection earlier the judgment-debtor has lost his right to
raise this objection and he is estopped, deserves to be accepted, although in
the light of what we have discussed earlier, it is not necessary to go into
this question, having come to the conclusion on the first question against the
is to be noted that in the earlier SLP the stand was that there was no
liability prior to 1984. In other words the dispute related to post-1984 and
also there is no dispute after 1997.
also to be noted that there was no point raised relating to interest before the
Admittedly, Municipal Corporation was not a party before the High Court and was
subsequently impleaded. It is stated before this Court that so far as the
appellant is concerned, the Corporation has completed the assessment
proceedings and bills amounting to Rs.1,02,23,706.88, have been raised.
is pointed out that in terms of the order dated 24.7.2000 of the Deputy
Municipal Commissioner (Revenue HQ) the said premises were surveyed and
assessed. The assessment was made from April 1974 to March 2001, when it was
found that a total amount of tax payable, in respect of the said premises, as
assessed is Rs.26,47,07,167/- out of which approximately Rs.7.70 crores, which
includes Rs.1,10,50,624.51 p. in Suspense A/c., have been realized.
more than Rs.18.7 Crores of tax is due from the premises. The details of year
wise valuation and tax liability contained in a Summary Report on Annual
Valuation with Tax Liabilities of premises No.24, Park Street, Kolkata. A copy of the report has
The High Court has referred to all the relevant factors and has kept in view
the correct position in law. That being so, there is no merit in these appeals
which are accordingly dismissed.