M.C.D. V. Shashnak
Steel Industries (P) Ltd.  INSC 1958 (17 November 2008)
Judgment ) SUPREM E
CO URT O F INDIA RECORD OF PROCEEDINGS Civil Appeal Nos. 6802-6806 of 2003
M.C.D. .. Appellant(s) Versus Shashnak Steel Industries (P) Ltd. .. Respondent(s)
CIVIL APPEAL NO. 6800 OF 2003 CIVIL APPEAL NO. 7143 OF 2003 CIVIL APPEAL NO.
7144 OF 2003 CIVIL APPEAL NO. 1011 OF 2005 CIVIL APPEAL NO. 1019 OF 2005 CIVIL
APPEAL NO......OF 2008 @ SLP(C) NO. 18371 OF 2006 DATE : 17/11/2008 These
matters were called on for pronouncement of judgment today.
For Appellant(s) Mr.
C.S. Ashri, Adv.
Mr. Praveen Swarup,
For Respondent(s) M/s
V.B. Saharya, Adv.for M/s Saharya & co.,Advs.
Mr. Sudhir Nandrajog,
--- Hon'ble Mr.
Justice S.H. Kapadia pronounced the judgment of the Bench comprising his
Lordship and Hon'ble Mr. Justice B. Sudershan Reddy Leave granted in SLP(C) No.
18371 of 2006 The appeals are dismissed with no order as to costs in terms of
the signed judgment which is placed on the file.
[ S. Thapar ] [ Madhu
Saxena ] PS to Registrar Court Master [ Signed reportable judgment is placed on
the file ] IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL
APPEAL NOS.6802-6806 OF 2003 Municipal Corporation of Delhi ... Appellant(s)
versus Shashnak Steel Industries (P) Ltd. ... Respondent(s) WITH
Civil Appeal No.6800/2003, Civil Appeal No.7143/2003, Civil Appeal
No.7144/2003, Civil Appeal No.1011/2005, Civil Appeal No.1019/2005, Civil
Appeal No. 6687 of 2008 (arising out of S.L.P. (C) No.18371/2006)
S. H. KAPADIA, J.
granted in S.L.P. (C) No.18371 of 2006.
this batch of civil appeals we are concerned with two types of matters - one
concerning perpetual sub-lease and the other concerning lease.
lead matter is Civil Appeal Nos.6802-6806 of 2003 - Municipal Corporation of
Delhi vs. M/s. Shashnak Steel Industries Pvt. Ltd. which concerns Perpetual
Sub-lease dated 20.2.81. Similarly the lead matter for the other set of civil
appeals is Civil Appeal No.1011 of 2005 - Municipal Corporation of Delhi v.
M/s. Gauri Constructions Co.
NOS.6802-6806 OF 2003
Perpetual Sub-lease dated 20.2.1981 stood executed between the President of
India (as the lessor), Mohan Co-operative Industrial Estate Ltd. (as the
lessee) and M/s. Shashnak Steel Industries Pvt. Ltd. (as the sub-lessee) of an
quote here in below some of the relevant recitals and the terms and conditions
of the said Deed dated 20.2.1981:
indenture made this Twentieth (20th) of February One thousand nine hundred and
Eighty one between the President of India (hereinafter called "the
lessor") of the one part and the Mohan Co-operative Industrial Estate Ltd.
Society registered under the Bombay Co-operative Societies Act, 1925, as in
force in the Union Territory of Delhi and having its registered office at S.
Mohan Singh Building, Connaught Lane, New Delhi hereinafter called "the
Lessee" of the second part and M/s.
Industries Pvt. Ltd. hereinafter called sub-lessee of the third part.
(i) Whereas by a
lease executed on the Twentieth (20th) of February One thousand nine hundred
and Eighty and registered in office of the Registrar/Sub-Registrar, Delhi/New
Delhi (hereinafter called "the lease", a copy of which is annexed
hereto and marked `X') the Lessor demised unto the lessee in perpetuity the
industrial plots as mentioned therein.
(ii) And whereas
under the lease the lessee has to sub-lease, on such premium and yearly rent as
may be fixed by the lessor, one industrial plot to each of the members of the
lessee who may be approved by the Chief Commissioner Delhi (hereinafter called
"the Chief Commissioner") for carrying on such manufacturing process
or running such industry as may be approved by the Chief Commissioner.
(iii) And whereas the
Sub-lessee has applied to the lessee for the grant of a perpetual sub-lease of
an industrial plot and, on the faith of the statements and representations made
by the Sub- lessee, the Lessee has agreed grant and the lessor has agreed to
confirm a perpetual sub-lease of an industrial plot.
(iv) And whereas on
an application by the lessee the lessor has fixed the amount to be paid
initially towards premium before the execution of these presents (and the
lessor shall fix subsequently additional or sum payable towards premium as
provided in the covenants hereinafter contained) and the yearly of industrial
plot hereby sub-leased.
(v) And whereas the
Chief Commissioner has approved the sub-lessee and the manufacturing process be
carried on or the industry to be run on the said industrial plot by the
Now this indenture
witnesseth that, in consideration of the sub- lessee having paid to the lessee
16,093.60 Sixteen thousand and ninety three and paise sixty only towards
premium before the execution of these present (the receipt whereof the lessee
hereby acknowledges) and of the rent hereinafter reserved and of the covenants
on the part of the Sub-lessee hereinafter contained, the lessee doth hereby
sub-lease and the lessor doth hereby confirm unto the sub-lessee. .........
Subject always to the
exceptions reservations, covenants and conditions contained in the lease and
hereinafter contained that is to say as follows:- Covenants and the conditions
contained in the Lease I. The lessor ...
(1) The Sub-lessee
shall pay to the lessee within such time such additional sum or sums towards
premium in respect of the industrial plot as may be decided upon and fixed by
the lessor on account of the compensation awarded by the Land Acquisition
Collector being enhanced on reference or in appeal or both as mentioned in
Sub-clause (1) and (5)(a) of Clause II of the Lease and the decision of the
lessor in this behalf shall be final and binding on the Sub-lessee and lessee.
(2) The Sub-lessee
shall pay unto the lessee the yearly rent hereby reserved on the days and in
the manner herein before appointed.
(4) The sub-lessee
shall at all times duly perform and observe all the covenants and conditions
which are contained in the lease on the part of the lessee or sub-lessee there
under to be performed and observed insofar as the same may be applicable to,
affect and relate to the industrial plot sub-leased to him.
(5) The sub-lessee
shall within a period of two years from the twentieth day of February one
thousand nine hundred eighty one and the time so specified shall be of the
essence of the contract after obtaining sanction to the building plan, with
necessary designs, plans and specifications from the proper municipal or other authority
at his own expense erect upon the industrial plot and complete in a substantial
and workmanlike manner an industrial building for carrying on be approved
manufacturing process or industry within the requisite and proper walls, sewers
and drains and other conveniences in accordance with the sanctioned building
plan and to the satisfaction of such municipal or other authority.
(6)(a) The sub-lessee
shall not sell, transfer, assign or otherwise part with the possession of the
whole or any of the industrial plot in any form or manner, benami or otherwise
to a person who is not a member of the lessee.
(b) The Sub-lessee
shall not transfer assign or otherwise part with the possession of the whole or
any part of the industrial plot to any other member of the lessee except with
the previous consent in writing of the lessor which it shall be entitled to
refuse in his absolute discretion.
Provided that, in the
event of the consent being given, the lessor may impose such terms and
conditions as thinks fit and the lessor shall be entitled to claim and recover
a portion of the unearned increase in the value (i.e. the difference between
the premium paid and the market value) of the industrial plot at the time of
sale transfer assignment, or parting with the possession, the amount to be
recovered being fifty percent of the unearned increase and the vision of the
lessor in respect of the market value shall be final and binding.
Provided further that
the lessor shall have the pre-emptive right to purchase the property after
deducting Provided that the Lt. Governor reserves the right to resume any plot
or part thereof on payment of reasonable compensation which may be required for
the development of the area like laying of sewerage, Trunk Services, Electric
and Telephone Wires and Water Supply lines etc., or such other purposes, which
may be deemed of public and general utility.
Lessor shall be
entitled to claim the recover one fifty percent of the unearned increase in the
value of the industrial plot as aforesaid and the amount of the lessor's share
of the said unearned increase shall be a first charge, having priority over the
said mortgage or charge. The decision of the lessor in respect of the market
value of the said industrial plot shall be final and binding on all parties
Provided further that
the lessor shall have the pre-emptive right to purchase the mortgaged or
charged property after deducting fifty percent of the unearned increase as
(7) The lessor's
right to the recovery of fifty percent of the unearned increase and the
pre-emptive right to purchase the property as mentioned hereinafter shall apply
equally to an involuntary sale or transfer whether it be by or through an
executing or insolvency court.
(10) The sub-lessee
shall from time to time and at all time pay and discharge all rates, taxes,
charges and assessment of every description which are now or may at any time
hereafter during the continuance of the sub-lease be assessed, charged or
imposed upon the industrial plot hereby sub-leased or on any building to be
erected hereupon or on the landlord or tenant in respect thereof.
(14) The sub-lessee
shall not without the written consent of the lessor use or permit to be used
the industrial plot or any building thereon for residence or for carrying on
any trade or business whatsoever or use the same or permit the same to be used
for any purpose other than that of carrying on the manufacturing process or running
the industry of Item as per Master Plan or such other manufacturing process or
industry as may be approved from time to time by the Chief Commissioner or to
or suffer to be done therein any Act or thing whatsoever which in the opinion
of the lessor may be a nuisance, annoyance or disturbance to the Lessor, Lessee
and other Sub-lessees and persons in the neighborhood.
(16) The sub-lessee
shall on the determination of this Sub- lease peaceably yield up the said
industrial plot and the buildings thereon unto the lessee or the lessor, as may
III. If the sum or
sums payable towards the premium or the yearly rent hereby reserved or any part
thereof shall any time be in arrear and unpaid for one calendar month next
after any of the days whereon the same shall have become due whether the same
shall have been demanded or not, or if it is discovered that this sub-lease has
been obtained by suppression of any fact of by any mis-statement,
misrepresentation or fraud if there shall have been in the opinion of the
lessee or the lessor and the decision of the lessor shall final any breach by
the sub-lessee or by any person claiming through or under him of any of the
covenants or conditions contained herein and in the lease and on his part to be
observed or performed, then land in any such case, it shall be lawful for
lessor or the lessee with the prior consent in writing of the lessor
notwithstanding the waiver of any previous cause or right of re-entry upon the
industrial plot and sub-leased and the buildings thereon, to re-enter upon and
take possession of industrial plot and buildings and fixtures thereon, and
thereupon this sub-lease and everything herein contained shall cease determine
in respect of the industrial plot so re-entered upon, and the sub-lessee shall
not be entitled to any compensation whatsoever nor to the return of any premium
paid by him.
IV. No. forfeiture or
re-entry shall be effected until the lessor or the lessee has served on the
sub-lessee a notice in writing.
(a) specifying the
particular breach complained of and (b) if the breach if capable of remedy,
requiring the sub- lessee to remedy the breach.
and the sub-lessee
fails within such reasonable time as may be mentioned in the notice to remedy
the breach if it is capable of remedy; and in the event of forfeiture or
re-entry the lessor in his discretion or the lessee, with the prior consent in
writing of the lessor may relieve against forfeiture on such terms and
conditions as the lessor thinks proper."
6. In this civil
appeal the main contention of the Corporation is that the perpetual sub-lease
dated 20.2.81 operated as a conveyance having the effect of transferring
leasehold rights, which constituted "land" as defined in Section
2(24) of the Delhi Municipal Corporation Act, 1957, in favour of M/s. Shashnak
Steel Industries Pvt. Ltd., who on purchase became the "owner"
thereof as defined under Section 2(37) of the said 1957 Act and consequently as
the said "owner" became exigible primarily to pay property tax under
Section 120(1)(c) of the said 1957 Act. In short, according to the Corporation,
M/s. Shashnak Steel Industries Pvt. Ltd. was the owner of the leasehold rights
under the said Deed who was primarily liable to pay property tax under Section
120(1)(c) of the said 1957 Act. This argument has been rejected by the High
Court which has interpreted the perpetual sub-lease dated 20.2.81 in entirety
and has come to the conclusion that on account of various restrictions put on
the sub-lessee it cannot be said that M/s. Shashnak Steel Industries Pvt. Ltd.
(sub-lessee) was the owner of the industrial plot and that the perpetual
sub-lease did not operate as a conveyance. The impugned judgment of the High
Court was given in Civil Writ Petition No.1336 of 1990 dated 17.9.2002, hence
this civil appeal is filed by the Corporation.
7. For the sake of
convenience, we also quote the relevant provisions of the Delhi Municipal
Corporation Act, 1957 which read as follow:
PRELIMINARY Section 2. Definitions.- In this Act, unless the context otherwise
requires, - (24). "land" includes benefits to arise out of land,
things attached to the earth or permanently fastened to anything attached to
the earth and rights created by law over any street;
"owner" includes a person who for the time being is receiving or is
entitled to receive, the rent of any land or building whether on his own
account or on account of himself and others or as an agent, trustee, guardian
or receiver for any other person or who should so receive the rent or be
entitled to receive it if the land or building or part thereof were let to a
tenant and also includes- (a) the custodian of evacuee property in respect of
evacuee property vested in him under the Administration of Evacuee property Act,
1950 (31 of 1950);
(b) the estate
officer to the Government of India, the Secretary of the Delhi Development
Authority, constituted under the Delhi Development Act, 1957 (61 of 1957), the
General Manager of a railway and the head of a Government department, in
respect of properties under their respective control;
TAXATION Levy of taxes Section 120. Incidence of property taxes.- (1) The
property taxes shall be primarily leviable as follows:- (a) if the land or
building is let, upon the lessor;
(b) if the land or
building is sub-let, upon the superior lessor;
(c) if the land or
building is unlet, upon the person in whom the right to let the same vests:
Provided that the
property taxes in respect of land or building, being property of the Union,
possession of which has been delivered in pursuance of Section 20 of the
Displaced Persons (Compensation and Rehabilitation) Act, 1954 (44 of 1954),
shall be primarily leviable upon the transferee."
8. At the outset it
may be stated that in this civil appeal we are concerned with the assessment
years 1982 to 1987 when admittedly the land in question was vacant land. We may
also state at the outset that in this civil appeal we are concerned with
interpretation of sub-lease dated 20.2.81 which has been annexed to the civil
appeal paper book.
9. The forms in which
tenancies are created in India are not uniform and they do not conform to the
precedents known to convincing; sometimes the words used are no t
precise and it is not
easy to understand from the said words the intention of the parties in
executing the documents. The nature of the tenancy created by any document must
be determined by construing the document as a whole. If the tenancy is for a
building purpose, as is the case herein, then prima facie it is intended for
the life time of the lessee or it may in certain cases be even a permanent
lease. Prima facie such a lease is not intended to be tenancy at will. But
whether it is tenancy for life or a permanent tenancy must ultimately depend
upon the terms of the contract itself. [See: Sivayogeswara Cotton Press,
Devangere and others v. M. Panchaksharappa and another - AIR 1962 SC 413].
10. Although it is
the case of the Corporation that the perpetual sub-lease operated as a
conveyance for which reliance was placed on the terms and conditions mentioned
in the Deed, what we are concerned in this civil appeal is:
whether on the terms
and conditions mentioned in the said Deed, could primary liability to pay
property taxes be placed on the assessee under Section 120(1)(c) of the said
1957 Act to pay property taxes. It is well settled that "intendment"
has no role to play in a taxing statute. Section 120(1) falls in Chapter VIII
of the said 1957 Act which deals with taxation.
11. Before dealing
with the provisions of the Chapter VIII of the said 1957 Act we are required to
analyse the Deed dated 20.2.81. The Deed is described as perpetual sub-lease.
The President of
India under the Deed is the lessor, Mohan Co-operative Industrial Estate Ltd.
is described as lessee and M/s. Shashnak Steel Industries Pvt. Ltd. is
described as a sub-lessee. We have quoted the recitals extensively hereinabove.
On reading the first recital, we enquired from Ms. Madhu Tewatia, learned
counsel appearing on behalf of the Corporation, as to the existence of the
lease dated 20.3.80 which is referred to in the first recital as "annexed
This query was raised
because it was argued on behalf of the Corporation that the Deed dated 20.2.81,
which is the Deed in question, was between the President of India and M/s.
Shashnak Steel Industries Pvt. Ltd. in which the lessee, namely, Mohan
Co-operative Industrial Estate Ltd. was the confirming party. Since this was
the argument put in the forefront by the learned counsel for the Corporation we
enquired of the lease dated 20.3.80. It was not produced. Be that as it may, on
reading the said Deed dated 20.2.81 we find that there was a lease deed dated
20.3.80 between the lessor and the lessee in the first instance under which the
lessee Mohan Co-operative Industrial Estate Ltd. was given the authority to
sub-lease on such premium and yearly rent as may be fixed by the lessor
(President of India). This position emerges from the second recital in the
Deed. It also appears from the first recital that the lessor had demised the
lease in perpetuity to the lessee - Mohan Co-operative Industrial Estate Ltd.
on 20.3.80. Similarly, from the third recital it becomes clear that the
sub-lessee (M/s. Shashnak Steel Industries Pvt. Ltd.) had applied to the lessee
- Mohan Co-operative Industrial Estate Ltd. for grant of perpetual sub- lease
of an industrial plot to which the lessee had agreed.
The most important
aspect in the third recital is that the sub- lessee had applied for the lease
to the lessee, the lessee agreed to sub-let and the lessor (President of India
through Delhi Administration) had agreed to confirm a perpetual sub- lease.
This position is also stated in the operative part of the said Deed before
setting out the terms and conditions.
Therefore, the lessor
and not the lessee is the confirming party to the sub-lease between the lessee
- Mohan Co- operative Industrial Estate Ltd. on one hand and M/s. Shashnak
Steel Industries Pvt. Ltd. on the other hand.
Therefore, there is
no merit in the contention advanced on behalf of the Corporation that under the
Deed lessor conferred leasehold rights to the sub-lessee to which the lessee
was a confirming party. On the contrary, the said Deed indicates the lease was
between the lessee and the sub-lessee to which the lessor was the confirming
party. There is one more aspect to be kept in mind. The lessor is the
confirming party because under the Deed in question rent and premium was
revisable periodically and the determination of the revised/enhanced rent/premium
was left to the lessor though rent and premium was payable by the sub-lessee to
12. The said Deed
indicates that the sub-lessee obtained the sub-lease in order to put up an
industrial unit on the industrial plot.
13. In this case great
emphasis is placed by the Corporation on the fact that the sub-lessee was
required to pay a sum of Rs.16093.60 as premium in addition to rent which
according to the Corporation indicated purchase of leasehold rights. According
to the Corporation on purchase of leasehold rights the sub-lessee became the
We find no merit in
this contention. If one looks at the Deed in question we find that the lessor
has retained its right to determine periodically the rent payable and the
premium chargeable. One has to keep in mind the purpose of the Deed in
question. What was demised was an industrial plot.
Initially, the lessee
- Mohan Co-operative Industrial Estate Ltd. was given the authority to
sub-lease the industrial plot on such premium and yearly rent as may be fixed
by the lessor.
Industrial Estate Ltd. was a society registered under Bombay Co-operative
Societies Act, 1925;
one of its members
appears to be M/s. Shashnak Steel Industries Pvt. Ltd. who had agreed under the
Deed in question to set up an industrial unit. Under one of the terms, the
sub-lessee was required to pay premium and rent to be fixed by the lessor.
However, both rent and premium was payable by the sub-lessee to the lessee. As
stated, the sub- lessee had agreed to put up at its own expense a factory on
the industrial plot within two years from dated 20.2.81.
Under the Deed the
lessor had to estimate the capital value (including the enhancement) as and
when the unit came up.
It appears from the
Deed that lessor was entitled to a share in the enhanced value. The said Deed
further stated that the lessor shall have a right to recover 50% of the
unearned increase as and when the lessor gives permission to the sub- lessee to
transfer, assign or part with the possession of the plot to any other member of
the lessee society. All these terms indicate that under the Deed parties
contemplated that on the unit coming up on the leasehold land there would be an
accretion in the value. In our view, the provision for premium was only an
additional source of revenue.
Therefore, we do not
find any merit in the contention advanced on behalf of the Corporation that on
payment of premium the sub-lessee became the owner of the leasehold rights.
Further as rightly held by the High Court there are numbers of restrictions put
on the sub-lessee which prevented the sub-lessee from full enjoyment of the
leasehold rights. Under Clause 6(a) the sub-lessee was not entitled to sell,
transfer, assign or part with possession of the whole or any part of the
industrial plot to a person who is not a member of the lessee society - Mohan
Co-operative Industrial Estate Ltd. Under Clause 6(b) it was not allowed to
transfer, assign or part with possession to any other member of the lessee
society, except with the prior consent in writing of the lessor which in its
discretion is entitled to refuse such concept. Further, under Clause 6(b), in
the event of consent being given, it was open to the lessor to claim a portion
of the unearned increase in the value. Under Clause 16, on determination of the
sub-lease, M/s. Shashnak Steel Industries Pvt. Ltd. herein had to yield up the
industrial plot along with the buildings thereon unto the lessee/lessor. The
said restrictions indicate that the said Deed did not operate as a conveyance.
14. In this case, we
are concerned with the question of primary liability on the vacant land during
the period 1982 to 1987. During that period the factory had not come up.
Therefore, there was
no question of enhanced value on account of accretion taking place during the
Therefore, keeping in
mind the restriction(s) placed on the sub-lessee we are of the opinion that
this is a case of "letting".
It is not the case of
conferring ownership rights on the sub- lessee. Under the Deed, M/s. Shashnak
Steel Industries Pvt. Ltd. remains a sub-lessee. In fact, there is
forfeiture/re-entry provided for in the said lease. That right of
forfeiture/re-entry can be effected either by the lessor or by the lessee which
further shows that the sub-lessee is not in full enjoyment of the leasehold
rights in the property in question.
15. For the
aforestated reasons on interpretation of the perpetual sub-lease dated 20.2.81,
we are of the view that the said Deed cannot be construed as a conveyance of
leasehold rights in favour of M/s. Shashnak Steel Industries Pvt. Ltd. We are
of the view that this case is that of letting. Therefore, we do not find any
infirmity in the impugned judgment. We also agree with the view taken by the
Delhi High Court that a bare perusal of the Deed would show that the condition
imposed on the sub-lessee to pay tax is only as a matter of indemnification and
it would not indicate ownership of the leasehold rights in favour of the
16. Coming to the interpretation
of the provisions of Section 120(1) of the said 1957 Act, at the outset we may
state that the language of the said section suggests that the intention of the
Legislature in fixing primary liability of property tax upon the owner of the
land is to facilitate the collection of property tax. It is not unreasonable
for the Legislature to impose the primary liability upon the lessor and to give
him the right of recoupment. In this case, we are concerned only with the
question as to whether the Corporation was right in imposing primary liability
to pay property tax on the sub-lessee under Section 120(1)(c) of the said 1957
Act. Whether the liability was on Mohan Co- operative Industrial Estate Ltd.,
is not required to be gone into by us because that is not the case of the
Corporation and also because the lease between the President of India and Mohan
Co-operative Industrial Estate Ltd. dated 20.3.80 was not produced before us.
We also do not know the basis on which premium was payable by the lessee to the
17. On a bare reading
of Section 120(1)(c), in the context of the Deed dated 20.2.81, we find that
the said Deed did not operate as a conveyance and that the industrial plot was
let out to M/s. Shashnak Steel Industries Pvt. Ltd. Since there was letting in
favour of the said company, Section 120(1)(c) of the said 1957 Act did not
18. For the
aforestated reasons, we see no infirmity in the impugned judgment of the Delhi
High Court. Accordingly, the civil appeal filed by the Corporation is dismissed
with no order as to costs.
Facts in Civil Appeal
No.1011/2005 and other Civil Appeals
19. The lead matter
in this set of civil appeals is Civil Appeal No.1011 of 2005 - Municipal
Corporation of Delhi v. M/s. Gauri Constructions Co. On 7.5.1999 there was a
Perpetual Lease executed by the President of India through Delhi Administration
as lessor in favour of M/s. Gauri Constructions Co. (respondent herein). Unlike
Mohan Co- operative Industrial Estate Ltd., the lessee in the earlier case, the
respondent herein had no right to sell, transfer, assign or part with the
possession of the commercial plot except with the consent in writing from the
lessor who was entitled to refuse such consent in its absolute discretion. In
the case of M/s. Shashnak Steel Industries Pvt. Ltd. (supra) it was a case of
grant of Perpetual Sub-lease. In that case there were two leases. In the first
instance, there was a lease dated 20.3.80 from the lessor to Mohan Co-operative
Industrial Estate Ltd.
(lessee), a society
registered under Bombay Co-operative Societies Act, 1925, under which the
lessee was entitled to sub-lease whereas in the present case of M/s. Gauri
Constructions Co., no such right was given to the lessee to sub-lease. In the
circumstances, for the reasons given hereinabove, the case of M/s. Gauri
Constructions Co. would not attract Section 120(1)(c) of the said 1957 Act. In
this civil appeal also we are concerned only with the period when the land was
concluding, we may state that there is a difference between
"liability" and "exemption from liability".
In this case Union of
India is exempt from payment of property tax, we are not concerned with that
aspect. We are only concerned with whether the assessee(s) was primarily liable
to pay property tax under Section 120(1)(c) of the said 1957 Act. For that
purpose, we were required to examine the Deed dated 7.5.99 to find out whether
the case is that of letting or conferment of ownership of leasehold rights. On
reading and analyzing the said Deed, we are of the view that it did not operate
as conveyance of leasehold rights.
120(1)(c) of the said 1957 Act is not attracted.
21. For the
aforestated reasons we find no infirmity in the impugned judgments of the Delhi
High Court and accordingly all the civil appeals filed by the Corporation stand
dismissed with no order as to costs.