Calcutta Guj. Education Society & Anr Vs.
Calcutta Municipal Corporation & Ors [2003] Insc 400 (25 August 2003)
M.B.
Shah & D.M.Dharmadhikari.
With
Civil Appeal Nos. 5204/2000, 5960/2000, 1572/2001 & 2212/2001 Dharmadhikari
J.
The
present appeal along with other connected appeals is on the question of
validity and proper interpretation of impugned provisions of Calcutta Municipal
Corporation Act 1980 (hereinafter referred to as the 'Act' for short), which
are contained in Part IV Chapter XII under the Heading "Powers of Taxation
and Fixation of Consolidated Rates.
The
three Judges' Special Bench of the High Court of Calcutta on a reference made
by the Division Bench of the said Court, on the validity and interpretation of
the impugned provisions of the Act relating to taxes on property has delivered
a common judgment in different Writ Petitions, which has been assailed by
tenants, sub-tenants and landlords by separate appeals which are being decided
by this common judgment. It is not in dispute that the State Legislature is
competent to make a law conferring authority on the local bodies to impose
property tax to generate revenue for providing civic amenities like supply of
water, drainage, sewerage, collection, removal and disposal of solid waste,
fire prevention and fire safety, maintenance of streets and public places and
other allied services in the municipal areas where lands or buildings are
situated. A brief survey of the history of the legislation is necessary.
The
repealed Act i.e. Calcutta Municipal Act of 1951 levied equal tax on owner and
occupier of the lands and buildings within the municipal area. It provided for
issuance of two separate Bills where the premises are occupied only by one
tenant. The occupant's share of tax was collected from the tenant as the
occupier's Bill. However, in the case of premises having more than one
occupier, the 1951 Act had provided that the taxes under both the Bills i.e.
the owner's and the occupier's Bill, would be paid by the owner, but in turn,
he was competent to collect half of the total taxes paid i.e. occupier's share
proportionately from each occupier. The taxes were charged on the rent payable
and the rate was also low. The working of the above provision of the Act of
1951 resulted in development of a system where the occupier's share of tax was
included in the rent by the owner and both the shares were paid by the owner to
the municipality instead of owner paying the taxes and then pursuing remedies
against the tenants for collection of the portion of tax imposed by the Act on
the tenant or occupier.
In
conformity with the above mentioned provisions of the Municipal Act 1951, the
West Bengal Premises Tenancy Act 1956 (shortly referred to as 'Tenancy Act')
provides that 50% of the total property tax can be included in the "Fair
rent." According to the Corporation, with the ever-increasing population
of Calcutta and requirement felt of increasing and improving the civic
amenities, it is found necessary to increase property tax particularly on lands
and buildings which are being put to use within the municipal area for
non-residential and commercial purposes. The earlier system which existed under
the Municipal Act of 1951, the revenue collected through property tax was
limited by the "Fair rent" fixed under the tenancy law. To augment
revenue of the Corporation for increasing and maintaining the civic amenities
it was felt necessary that a separate 'Surcharge' should be levied on
properties occupied for non-residential or commercial purposes.
The
present Act was enacted in 1980 providing for valuation on the basis of market
rate of rent and higher rate of tax by introducing a consolidated rate of tax
combining the tax on owners and tax on occupiers. The 'surcharge' leviable on
the occupiers of properties for non- residential/commercial use was included in
the "consolidated rate." The present Act by the impugned provisions
provides for collection of the entire tax named as "consolidated
rate" inclusive of owner's and occupier's share from the owner with the right
being given to the owner to make recovery of unpaid 'surcharge' from the
occupier or the tenant as 'rent'.
For
appreciating the nature of various challenges made to specific provisions of
the Act, it would be necessary to examine generally the scheme of the Act under
Chapter XII on subject of Power of taxation and fixation of "consolidated
rates." Under Section 2(60) the word "Occupier" is defined to
include an owner living in or otherwise using his building and a tenant or any
person for the time being paying or liable to pay to the owner the 'rent' or
any portion of the rent. Section 2(62) defines the word 'owner' to include
person for the time being receiving the rent of the property on his own account
or as agent or trustee. Section 170 is a charging section which empowers the
Corporation amongst other taxes to levy tax on consolidated rate on lands and
buildings. Section 171 and 171(2) provide that such consolidated rate shall be
11% where the annual value of the property does not exceed Rs.600/-. Where the
annual value exceeds Rs.600/- but does not exceed Rs.18,000/- the percentage or
annual value is worked out on a mathematical formula which is specified thus
"by dividing the annual value by 600 and then adding 10 to the quotient.
The sum thus worked out being rounded off to the nearest first place of the
decimal." Where the annual value exceeds Rs.18,000/- the consolidated rate
would be 40% of the annual value." Sub-section (4) of Section 171 which is
mainly attacked by the appellants provides that "where any land and
building or hut or portion thereof is used for commercial or non- residential
purpose, the Corporation may levy a surcharge on the consolidated rate on such
land or building or hut or portion thereof at such rate not exceeding 50% of the
consolidated rate as the Corporation may from time to time determine." It
further provides that "where only a portion of the land or building or hut
is used for such purposes i.e. other than residence, the amount of the
consolidated rate payable in respect of the said portion shall be separately
calculated while fixing the consolidated rate." Section 174 lays down the
method of determination of 'annual valuation.' The said section provides that
for the purpose of assessment of consolidated rate the annual value of any land
or building shall be deemed to be the gross annual rent including service
charges, if any, at which such land or building might, at the time of
assessment, be reasonably expected to let from year to year, less an amount of
10% for the cost of repairs and other expenses necessary to maintain such land
or building in a state to command such 'gross rent.' Sub-section 4A of Section
171 lays down an alternative mode of determination of annual valuation for
consolidated rate where this gross annual value on the basis of rent, likely to
be fetched, is unascertainable. By the alternative mode 'gross annual rent of
such land or building shall be deemed to be 7.5% of the value of the building
obtained by adding the estimated cost of erecting building at the time of
assessment less a reasonable amount to be deducted on account of depreciation
to the estimated present market value of the land.' Section 178 enables State
Government to frame rules for determining value of any land and building in Calcutta and the rules so framed and
regulations thereunder are to constitute the Municipal Assessment Code.
This
Court in the case of India Automobiles Ltd. vs. Calcutta Municipal Corporation
[2002 (3) SCC 388] dealing with the provisions of the Act, has indicated all
relevant factors which have to be taken into account for determination of
annual letting value and assessment of tax on properties. In such
determination, the relevant circumstances are amongst others actual rent
received, hypothetical standard rent, the rent paid by sub-tenant, if any, the
prevalent rate of rent of lands and building in the vicinity of the property
being assessed. The relevant observations of this Court in the case of India
Automobiles Ltd (Supra) reads thus :- "The argument that the rent actually
received by the owner should always be deemed to be reasonable rent in the
absence of fraud, collusion and other extraneous considerations is too general
and broad proposition of law which cannot be accepted for the purpose of
determining the annual value of the property for the purposes of Section 174 of
the 1980 Act. In the light of clear and unambiguous provisions of Section 174
of the 1980 Act, it cannot be held that the amount realised by a tenant from a
sub-tenant cannot, at all be taken into consideration for the purposes of
determining the gross annual rent in the absence of extraneous considerations.
There is no substance in the submission of the learned counsel appearing for
the appellant that allowing the municiapl corporations to assess the annual rateable
value on the basis of the income of a tenant from the property would be grossly
unfair and would have the effect of rendering the rate provisions of the Act
unreasonable, arbitrary and unconstitutional. The Act itself has taken care by
making sufficient provision in Sections 193 and 194 regarding the liability to
pay the rent and apportionment of such liability when the premises are
assessed, let or sub-let. On proof of creation of sub-tenancy, the owner of the
building may also be entitled to seek eviction of their tenants under the
relevant provisions of the Rent Acts applicable in the State where the land or
property is located. We find some substance in the submission of the learned
counsel for the appellant that permitting the municipal authorities to assess
the annual value only on the basis of the rent paid by the sub-tenant to the
tenant and fixing its liability on the owner may adversely affect the owners of
the buildings who have let their premises at a time when rents were meagre and
who under the rent control statutes are deprived of getting possession back of
the lands and buildings from their tenants. The 1980 Act, therefore, requires
application of mind by the municipal authorities to determine the rents on the
basis of reasonableness by keeping into account all relevant circumstances
including the actual rent received by the owner, hypothetical standard rent,
the rent being received by the tenant from his sub-tenant and other relevant
consideration, such as prevalent rate of rent of lands and building in the
vicinity of the property being assessed. Only because the owner of the building
is not getting the same rent which the sub-tenant is paying to his lessor,
cannot be made a basis to deprive the corporations from determining the annual
valuation and taxing the land or building on that basis. If such a plea is
accepted, it would be against the provisions of the statute which has been
enacted to provide civic services in the form of water, drainage, sewerage,
collection, removal and disposal of solid waste, fire prevention and fire
safety maintenance of street and public places etc., in the municipal area
where such land or building is situate.
..................We
are of the view that the basis for determination of annual rent value has to be
the standard rent where the Rent Control Act is applicable and in all other
cases reasonable determination of such rent by the municipal authorities
keeping in view various factors as indicated herein earlier, including the rent
which the tenant is getting from his sub-tenant. In appropriate cases the owner
of the property may be in a position to satisfy the authorities that the gross
annual rent of the building of which the annual valuation was being determined
cannot be more than the actual rent received by such owner from his tenant. The
municipal authorities shall keep in mind the various pronouncements of this
Court, the statutory provisions made in the specified Municipal Acts, keeping
in mind the applicability or non-applicability of the Rent Act and the peculiar
circumstances of each case, to find out the gross annual rent of the building
including service charges, if any, at which such land or building might, at the
time of assessment, be reasonably expected to let from year to year in terms of
Section 174 of the 1980 Act".
Further,
sub-section (6) of section 178 obligates the Municipal Commissioner to supply
on payment necessary information to owner, lessee or occupier about the
apportionment of the "consolidated rate" of such property among
several occupiers of such land or building. Furnishing of such information,
however, does not preclude the Corporation from recovering the dues from any of
such persons owning or occupying land or building. Section 180 provides for revision
of the assessment of valuation for consolidated rate and enables owners and
occupiers of the property to submit returns pursuant to public notice for
revision of assessment of annual value. Section 182 obligates the owner or
occupier to submit returns in the prescribed time. The assessment list or the
revised assessment list is open to inspection and a public notice for that
purpose shall be issued in accordance with Section 184. Before revising the
annual valuation, public notices as also written notices will be given to the
owners and occupiers and they will be heard by the Municipal Commissioner. This
is the requirement of sub-section (1) to (4) of Section 184. Where the
assessments are amended, a fresh notice is required to be issued to owners, lessees
and occupiers for consideration of the proposed amendment.
Section
186 gives a right of filing objections against valuation or assessment, to the
owner as also to any person liable to pay the consolidated rate. Under Section
188, the objector will have an opportunity of hearing on his objection before
the competent authority. Section 189 provides for an appeal against the
assessment to Assessment Tribunal. The appeal can be preferred by the owner or
person liable to pay consolidated rate. The pre-condition of hearing of the
appeal is deposit of consolidated rate determined. Section 193 specifies the
persons on whom 'primarily' consolidated rate is leviable.
The
persons specified include the 'lessor,' where the land or building is let; the
'superior lessor,' where the land or building is sub-let and 'owner' or the
person in whom the right to let such land or building vests, where the land or
building is unlet.
The
most controversial provision the validity of which is questioned by the
appellant is Section 194 providing for apportionment of liability or
"consolidated rate" between owner, tenant, sub-tenant or occupier.
Sub-section (1) of Section 194 lays down that where annual valuation exceeds
the amount calculated on the basis of actual rent the person on whom the
"consolidated rate" is 'primarily' leviable shall be entitled to
receive from the tenant the difference between the amount of the consolidated
rate and amount which would be leviable if the "consolidated rate"
were calculated on the basis of the 'rent' payable to him. The object of this
provision is that consolidated rate calculated on the basis of rent fetchable
from the premises should not be a sole burden on the lessor or the owner. His
burden of tax is limited to the consolidated rate to be calculated on the basis
of actual rent received by him. The additional burden of "consolidated
rate" is shared by the tenant or occupier including 'surcharge' where the
property is being used for non-residential/commercial purposes. The same method
is to be adopted in accordance with sub-section (2) of Section 194 where the
accommodation is sub-let. In that eventuality, the burden of tax on tenant
would be proportionate to consolidated rate calculable on the basis of actual
rent received by him and the remaining which is to be calculated on the basis
of likely rent would be shared by the sub-tenant.
Section
195 of the Act lays down the mode of recovery of the 'consolidated rate'. Under
sub-section (1) of the said section, the primary liability would be of the 'lessor,'
'superior lessor' or 'the owner.' If the 'person primarily liable' to pay the
"consolidated rate," fails to pay, it will be recoverable from the
occupier by attachment of his rent in proportion to the sum due against him. On
such recovery from the occupier, the occupier would be liable to adjustment of
his dues to the lessor, superior lessor or the owner. Apart from the above,
there are other modes of recovery by a service of Bill and notice of demand and
coercive method under Bengal Public Demands Recovery Act, 1913. On failure of
the person to pay the tax on demand under section 219, recovery can be made by
distress and sale of his movable property. Section 225 empowers the Municipal
Commissioner to recover the consolidated rate from the occupier by attachment
of his rent.
On
failure of occupier to pay such rent, the amount will be recovered as arrears
for tax.
The
other controversial provision, which is forcefully attacked by the appellant,
is contained in Section 230 providing for apportionment of "consolidated
rate" by the 'person primarily liable to pay' i.e. the lessor, superior lessor
or the owner of the land or building. This provision empowers 'the person
primarily liable' to recover the consolidated rate to the extent of half from
the occupier, if there is only one occupier of the property. If there are more
than one occupier, he can recover from each occupier 'half of such sum as bears
to the entire amount of rate so paid by the owner-the same proportion as the
value of the portion of the land or building in the occupation of such occupier
bears to the entire value of such land or building.' It further provides that
if there are more than one occupier 'such half of the amount may be apportioned
and recovered from each occupier in such proportion as the annual value of the
portion occupied by him bears to the total annual value of such land or
building.' With regard to the 'surcharge' included in the 'consolidate rate'
which is levied on properties used for non- residential/commercial purposes,
clause (b) of Section 230 empowers the 'person primarily liable' to recover
entire amount of surcharge from the occupier and if there are more than one
such occupier, the surcharge is to be apportioned and recovered in such
proportion as the annual value of the portion occupied by him bears to the
total annual value of such property.
Section
231 is also a provision to which serious exception has been taken by the
appellant. It provides that the 'person primarily liable' to pay any
consolidated rate is entitled to recover portion of the consolidated rate
including surcharge from the occupier of the property and for that purpose 'the
person primarily liable' shall have the same rights and remedies as if such sum
were 'rent' payable to him by the person from whom he is entitled to recover
such sum.
The
learned counsel appearing for the appellant in this batch of petitions in their
own way and different status of their clients, have mainly challenged the
provisions of sections 184, 189, 194, 230, 231 and 234A. It is contended in
common that they are unworkable, impractical and hence unconstitutional.
It is
submitted that although, a major portion of the tax is actually levied on the
tenants, sub-tenants and the occupants, there is no proper machinery, method
and mode of assessment by involving this class of persons. They are, thus,
denied opportunity in the method of valuation and assessment. There are no
legal and constitutional safeguards against illegal determination of
consolidated rate before effecting recovery by coercive action of attachment of
rent or distress and sale of the property on which tax is imposed.
We
have also heard learned counsel appearing for the respondent-Corporation, who
has taken us through the various provisions of the Act. He strenuously urged
that the alleged ground of unworkability of the provisions is a total
misconception of the provisions and their misinterpretation. It is submitted
that primary liability to pay tax is on the owner of the property but in cases
where the property has been let or sublet, the burden of tax is apportioned
between the owner as lessor and the lessee or sub-lessee as the occupants. It
is submitted that it is impractical in a metropolitan city like Calcutta where there are several multi-storeyed
buildings to grant opportunity of participation in determination of valuation
and assessment of 'consolidated rate' to all and at every stage.
It is
also submitted that the provisions of the Act do provide a reasonable safeguard
to the tenants, sub-tenants or occupiers to object to the assessment or revised
assessment. They have right to file return, file objections and on deposit of
tax determined, prefer appeals. It is submitted that none of the provisions can
be said to be unworkable and, in fact, they have satisfactorily worked so far.
It is submitted that if there are any grievances against the action of any of
the Authorities under the Act, it is open to the aggrieved party to approach
the appellate forum or the regular courts in accordance with law.
Having
thus examined the scheme of the Act as also broadly the grounds urged, we shall
now deal with specific provisions of the Act which have been assailed by the
counsel appearing for the appellants.
Challenge
to Section 194 read with Section 230:
In assailing
the provisions of Section 194 read with 230 of the Act it is argued that
although, the owner is liable to the extent only of 50% of the property tax, he
is authorised to collect the entire 'surcharge' as well as water tax/other
charges from the tenants who are ultimately liable. The liability of landlord
is confined only to 50% of the property tax on the basis of the actual rent
received while the remaining portion of the 'consolidated rate' inclusive of,
surcharge, water tax and other charges are recoverable from the tenants. For
determination of the 'consolidated rate' even though the liability of the
landlord is limited to 50% of the property tax, all requisite notices for
valuation and assessment are given to the landlords who may not bother to seriously
contest the case before the competent authority because their liability is
limited and rest of the liability is on the tenant.
We
have examined the provisions contained in sections 194 and 230 of the Act and
other relevant provisions. We find that the grievance raised is not borne out
from the provisions contained in Chapter XII of the Act which indicate various
steps for determination of 'consolidated rates.' We have examined the scheme in
detail and we find that at the time of determination of valuation, assessment,
revision of assessment and amendment of the assessment, public and written
notices are required to be given to all concerned parties including owner,
tenant, sub-tenant and occupier' on tax and 'surcharge' proposed to be levied
for commercial or non-residential user of the properties. The tenants,
sub-tenants and occupiers are entitled to written notices. The provisions
contain a detailed procedure under which the tenants, sub-tenants or occupiers
pursuant to a public notice and written notice, are entitled to participate in
the process of valuation and assessment of consolidated rate by filing returns
and objections. See section 181, 184 and 186 of the Act which read thus :-
"181.
Submission of returns and inspection of lands and buildings for purposes of
assessment. –
(1)
The Municipal Commissioner may, with a view of enabling him to determine the
annual value of any land or building [in any ward or part thereof] and the
person primarily liable for the payment of any consolidated rate on such land
or building, [by a public notice,] require the owner or the occupier of such
land or building or portion thereof to furnish a return in such form, within
such period and in accordance with such procedure as may be prescribed.
(2)
The Municipal Commissioner may, [by a public notice,] require the owner or the
occupier of any land or building [in any ward or part thereof] used for public
cinema shows or theatrical performances or as a place of similar pulic
recreation, amusement or entertainment to furnish a return in such form, within
such period and in accordance with such procedure as may be prescribed.
(3)
Every owner or occupier [of any land or building referred to in the public
notice] under sub- section (1) or sub-section (2) shall be bound to comply with
such notice and to furnish a return with a declaration that the statement made
therein is correct to the best of his knowledge and belief.
(4) [
* * * * * * * ] (5) [*********** ] (6) [ * * * * * * * ]
(7)
"184. Public notice and inspection of assessment list.-
(1)
When the annual valuation under sub-section (2) of section 179 or a general
revaluation under sub-section (1) of section 180 in any ward of the Corporation
or part thereof, as the case may be, has been completed, the Municipal
Commissioner shall cause the respective valuation to be entered in an
assessment list in such form and containing such particulars with respect to
each land or building as may be prescribed.
(2)
When the assessment list has been prepared the Municipal Commissioner shall
give public notice thereof and of the place where the list or a copy thereof
may be inspected, and every person claiming to be the owner, lessee, sub-
lessee or occupier of any land or building include in the list and any authorised
agent of such person shall be at liberty to inspect the list and to take
extracts therefrom free of charge.
(3)
The Municipal Commissioner shall give public notice of the place, time and
date, not less than one month after the preparation of the assessment list as
aforesaid when he will proceed to consider the annual valuations of lands and
buildings entered in the assessment list, and in all cases in which any land or
building is for the first time assessed, or the annual value of any land or
building is increased, he shall also give written notice thereof to the owner
or to any lessee, sub-lessee or occupier of such land or building and shall
also specify in the notice the place, time and date, not less than one month
thereafter, when he will proceed to consider such valuation.
(4)
When a revision in the annual valuation of any land or building has been made
under sub-section (2) of section 180, the Municipal Commissioner shall cause
the respective valuation to be entered in the assessment list and shall give a
written notice thereof to the owner or to any lessee, sub-lessee or occupier of
such land or building, and shall also specify in the notice the place, time and
date, not less than one month thereafter, when he will proceed to consider such
valuation".
"186.
Objections against valuation of assessment.- Subject to the provisions of
section 181 or section 182, any objection to the annual value of a land or
building as entered in the assessment list shall be made by the owner or the
person liable to pay the consolidated rate, in writing, to the Municipal
Commissioner before the date fixed in the notice under Section 184 [or section
185] and shall state in what respect the annual value is disputed".
[Underlining
for emphasis] Learned counsel appearing for the Corporation submits that in the
city of Calcutta, there are such large number of multi-storeyed buildings that
service of individual notice to each tenant, sub-tenant as also on all the
occupants of such buildings and give them opportunity of hearing at every stage
would not only be a marathon exercise involving insurmountable practical
difficulties and bottlenecks but would make the whole process highly
cumbersome, if not, impossible in finalising the assessment within a reasonable
time. It would also put the Corporation to such a colossal establishment
expenditure which may be more than the actual amount of tax that might be
levied and found recoverable.
Such
argument cannot be accepted. The underlined portion of the provisions of the
Act is required to be followed and it grants effective participation to
tenants, sub-tenants and occupants who, pursuant to public notice or written
notices, approach the competent authority by raising objections and claim
opportunity of hearing in the course of proceedings. We, therefore, find that
the provisions of the Act allow full and effective participation to the
tenants, sub-tenants or occupants in the process of assessment of consolidated
rate.
Taking
into consideration, however, the practical difficulties particularly concerning
multi-storeyed buildings occupied by several tenants, sub-tenants and
occupants, a mere non-issuance and/or service of public and written notices to
all concerned individuals who are 'persons primarily liable or liable', would
not be treated by concerned authorities and courts as invalidating the
consolidated rate determined and apportioned on various persons regarding such
building/ buildings unless a serious prejudice is found to have been caused to
the persons aggrieved.
Somewhat
similar provisions in Bombay Provincial Municipal Corporation Act, 1949, were
examined and similar challenges made to them, on behalf of tenants and
occupants, were rejected by this Court in the case of Assistant General
Manager, Central Bank of India vs. Commissioner, Municipal Corporation [1995
(4) SCC 696]. See paragraph 14 of the said judgment which reads as under:
"We
are inclined to hold that in the scheme of the Municipal Corporations Act read
with Section 10 of the Bombay Rent Act, the tenant does possess the requisite
locus standi to file a complaint pursuant to public notice issued under Rule
15(1) or pursuant to special written notice issued under Rule 15(2) as well as
to right to file an appeal an appeal under section 406. This should be more so,
if there is an agreement between the landlord and tenant whereunder the
obligation to discharge and pay the property taxes is cast upon the tenant. It
is true that this is a private arrangement between the parties and cannot form
the basis of a legal right but it is certainly an additional factor conferring
the requisite locus standi upon the tenant. Even where the Bombay Rent Act is
not applicable to a particular building, the existence and proof of such an
agreement would enable the tenant to claim the requisite locus standi. Holding
otherwise would be grossly unjust to the tenant. While he is made liable,
statutorily or by private treaty, for the enhancement in the property taxes, he
is not being allowed to question the same. It is true, as contended by the learned
counsel for the Corporation, that no prudent owner of a building will allow the
assessment to be enhanced unreasonably just to spite the tenant, it cannot at
the same time be said that the tenant has no right to file an appeal against
the assessment or enhancement, as the case may be, when he is a person directly
affected by such assessment/enhancement. There is yet another circumstance: any
person proposing to file an appeal under Section 406 has to deposit the
disputed tax as contemplated by Section 406(2)(e) as a condition for
entertaining the appeal; since the landlord can pass on the enhanced burden to
the tenant according to the Bombay Rent Act and also where there is a
stipulation between him and the tenant where under the liability to pay the property
taxes is exclusively placed upon the tenant, the landlord would not be minded
to take the trouble of filing the appeal since he would be obliged to deposit
the disputed tax; he may think - and probably legitimately - why should he
deposit the disputed tax and file the appeal when the burden of the said tax is
not falling upon him. This is also a relevant circumstance in favour of reading
a right (to object and appeal) in the tenant. At the same time, it cannot be
predicated that the special notice contemplated by Rule 15(2) has necessarily
to be served upon the tenant. No such right can be claimed by the tenant nor
such an obligation to cast upon the Corporation. The tenant has to be vigilant.
There will be a public notice under Rule 15(1) wherever an enhancement is
proposed.
Even
the special notice under Rule 15(2) may, in the normal course, be served upon
him because he is in occupation of the premises but that may or may not happen.
(In a given case, the landlord may be residing in a portion of the same
building;
there
may be more than one tenant in the building and so on.) Even if the special
notice is not served upon him, he has to file the complaint within the time
prescribed by the notices and the Rules".
Challenge
to Section 195:
The
next ground urged is that if the landlord does not pay the consolidated rate or
surcharge the same is made recoverable under Section 195 from the tenants by
attaching rents payable by them. It is argued that in the event of any dispute
regarding the rent between the landlord and the tenant, the tenant is helpless
because the Corporation will collect from the tenant what the landlord declares
to be the rent from the tenant.
This
ground is also speculative. If there is dispute about rent, the tenant is
entitled to raise that dispute before the competent authority in the course of
assessment and also get its adjudication through the competent Court. Merely
because there is a dispute regarding rent, the Municipal authorities cannot in
law be made to wait for finalising assessment till the dispute of rent is
decided by some other forum. In the event of a dispute regarding rent, it is
open to the tenant to raise suitable objection before the competent authority
under the provisions of the Act for its decision in the course of valuation and
assessment of 'consolidated rate.' Non-participation by Owner:
It is
next urged that if the actual rent realised does not suffer any change, the
entire increase of tax based on market valuation is to be borne by the tenant
and the owner is not affected at all. These circumstances are such that an
owner, since he is not affected by increasing valuation, may choose not to
attend the hearing at the time of assessment, as he knows that he is entitled
to receive the entire increase in the property tax from the tenant or occupiers
and his individual liability based on actual rent remains unchanged.
The
aforesaid ground also does not seem to be acceptable. It is true that burden of
tax based on valuation in the assessment is to be borne by the tenant or
occupier but as we have examined the provisions, even though the landlord
remains inactive by not contesting the assessment proposed, the tenant or
occupier has to be vigilant and has right to object to the same pursuant to the
public and written notices.
The
tenants or occupants who have to shoulder major portion of the tax burden,
therefore, have to be vigilant and raise objections pursuant to public and
written notices and contest the assessments on valid grounds in their own
interest.
Right
of Appeal illusory:
The
next ground urged is that the right of appeal so far as the tenant, sub-tenant
or occupant is concerned is illusory.
It is
contended that the pre-condition of maintaining the appeal is deposit of
consolidated rate demanded for the property. The provision of the Act make the
tenant liable to pay only a portion of tax leviable on him to the owner. The
tenant receives neither Bills nor demand notices. In such circumstances, the
right of appeal is available only to the owner/lessor as the 'person primarily
liable.' The tenant although has to share the major burden of tax, is denied
the right of appeal. Even though, he is occupying only a portion of the
building it is unreasonable to demand of him to deposit whole consolidated rate
for the entire building for maintaining his appeal.
We
have examined the provisions of the Act. We find that the provisions do allow
the right of appeal as and when there is a demand of proportionate consolidated
rate or surcharge from tenants, sub-tenants or occupants. There is great force
in the submission made that where the tenant is occupying only a portion of the
building and his liability towards 'consolidated rate' or 'surcharge' is
proportionately restricted to the portion of the building in his occupation,
for exercising right of appeal, to make it compulsory for him to deposit the
entire consolidated rate assessed and levied on the whole building, is
inequitable. The relevant provision contained in Section 189 (5) and (6) read
thus:
"(5)
Any owner or person liable to payment of consolidated rate may, if dissatisfied
with the determination of objection under section 188 appeal to the Tribunal:
Provided
that such appeal shall be presented to the tribunal within forty-five days from
the date of service of [a copy of the order] under section 188 and shall be
accompanied by a copy of the said order.
(6) No
appeal under this section shall be entertained unless the consolidated rate in
respect of any land or building for the period ending on the date of presentation
of the appeal on the valuation determined under section 188 has been deposited
[in the office of the Corporation] and the appeal shall abate unless such
consolidated rate is continued to be deposited till the appeal is finally
disposed of." As we had examined the provisions, since the tenants,
sub-tenants or occupiers have to share the burden of tax to an appreciable extent,
right of appeal cannot be denied to them.
If the
right of appeal is held to be available to them on payment of the entire tax
levied on the whole building even though they occupy only a portion of it, the
remedy of appeal would be highly onerous and virtually denied.
In the
aforesaid circumstances, on examination of provisions of the Act and as
reasonably construing Section 189(6) of the Act, we find that the 'right of
appeal' as an effective remedy has to be given to a tenant, sub-tenant or
occupant who is a 'person liable' with 'person primarily liable' for payment of
'consolidated rate' and it would be available only on payment of the
'consolidated rate' as apportioned as his liability and held payable by him.
Any other interpretation, would frustrate the very object of providing right of
appeal to 'person liable' with the 'person primarily liable' This is how the
provision has to be reasonably interpreted and read down.
The
rule of "reading down" a provision of law is now well recognised. It
is a rule of harmonious construction in a different name. It is resorted to smoothen
the crudities or ironing the creases found in a statute to make it workable. In
the garb of 'reading down', however, it is not open to read words and
expressions not found in it and thus venture into a kind of judicial
legislation. The rule of reading down is to be used for the limited purpose of
making a particular provision workable and to bring it in harmony with other
provisions of the statute. It is to be used keeping in view the scheme of the
statute and to fulfil its purposes. See the following observations of this
Court in the case of BR Enterprises vs. State of UP [1999(9) SCC 700]:-
"First attempt should be made by the courts to uphold the charged
provisions and not to invalidate it merely because one of the possible
interpretation leads to such a result, howsoever attractive it may be. Thus, where
there are two possible interpretations, one invalidating the law and the other
upholding, the latter should be adopted. For this, the courts have been endeavouring,
sometimes to give restrictive or expansive meaning keeping in view the nature
of legislation, may be beneficial, penal or fiscal etc. Cumulatively, it is to
sub-serve the object of the legislation. Old golden rule is of respecting the
wisdom of legislature, that they are aware of the law and would never have
intended for an invalid legislation. This also keeps courts within their track
and checks individual zeal of going wayward. Yet in spite of this, if the
impugned legislation cannot be saved the courts shall not hesitate to strike it
down. Similarly, for upholding any provision, if it could be saved by reading
it down, it should be done, unless plain words are so clear to be in defiance
of the Constitution. These interpretations spring out because of concern of the
courts to salvage a legislation to achieve its objective and not to let it fall
merely because of a possible ingenious interpretation. The words are not static
but dynamic. This infuses fertility in the field of interpretation. This
equally helps to save an Act but also the cause of attack on the Act. Here the
courts have to play a cautious role of weeding out the wild from the crop, of
course, without infringing the Constitution. For doing this, the courts have
taken help from the Preamble, Objects, the scheme of the act, its historical
background, the purpose for enacting such a provision, the mischief, if any
which existed, which is sought to be eliminated.
The
principle of reading down, however, will not be available where the plain and
literal meaning from a bare reading of any impugned provisions clearly shows
that it confers arbitrary, uncanalised or unbridled power." On behalf of
the Corporation learned counsel placed heavy reliance on paragraph 16 of the Judgement
of this Court in Central Bank of India (supra). It is argued that comparable provisions of Bombay Act were
examined and contention was rejected that right of appeal to tenants,
sub-tenants or occupiers on pre-deposit of tax for the entire property or
premises is inequitable and virtual denial of right of appeal.
We
have carefully gone through the decision of this court in the case of Central
Bank of India (supra) which arose out of Bombay
Provincial Municipal Corporation Act 1949 (for short the "Bombay
Act"). The provisions relevant on this aspect are contained in Sections
194 to 196 of the Act and read as under:
"194.
Apportionment of liability for consolidated rate on land or building when the
premises assessed are let or sublet.-
(1) If
the annual valuation of any land or building exceeds the amount calculated on
the basis of the rent of such land or building payable to the person upon whom
the consolidated rate on such land or building is leviable under Section 193,
such person shall be entitled to receive from his tenant the difference between
the amount of the consolidated rate on such land or building and the amount
which would be leviable if the consolidated rate on such land or building were
calculated on the basis of the rent payable to him.
(2) If
the annual valuation of any land or building which is sublet exceeds the amount
calculated on the basis of rent of such land or building payable to the tenant
by his sub-tenant or to the sub-tenant by the person holding under him, the
tenant or the sub-tenant shall be entitled to receive from his sub-tenant or
the person holding under him, as the case may be, the difference between any
sum recovered under this Act from such tenant or sub- tenant and the amount of
consolidated rate on such land or building which would be leviable if the
annual valuation of such land or building were calculated on the basis of rent payable
to the tenant by his sub-tenant or the sub-tenant by the person holding under
him.
"195.
Recovery of consolidated rate on lands and buildings from occupiers.-
(1) On
the failure to recover any sum due on account of consolidated rate on any land
or building from the person primarily liable therefor under section 193, [the
Municipal Commissioner shall, notwithstanding anything contained in the West
Bengal Premises Tenancy Act, 1956 or in any other law for the time being in
force, recover] from every occupier of such land or building, by attachment of
the rent payable by such occupier, a portion of the total sum due which bears,
as nearly as may be, the same proportion to that sum as the rent annually
payable by such occupier bears to the total amount of rent annually payable in
respect of the whole of such land or building.
(2) An
occupier, from whom any sum is recovered under sub-section (1), shall be
entitled to be reimbursed by the person primarily liable for the payment of
such sum, and may, in addition to have recourse to other remedies that may be
open to him, deduct the amount so recovered from the amount of any rent
becoming due from time to time from him to such person.
"196.
Payment of consolidated rate on lands and buildings. –
(1)
Save as otherwise provided in this Act, the consolidated rate on any land or
building under this Chapter shall be paid by the person liable for the payment
thereof in quarterly instalments and, for the purposes of this section, each
quarter shall be deemed to commence on the first day of April, first day of
July, first day of October, and first day of January, of a year.
(2)
The Municipal Commissioner shall cause to be presented to the person liable for
payment of the consolidated rate a comprehensive bill in respect of such rate
to be paid in quarterly instalments, showing separately the amount of the
consolidated rate due against each quarter and the date on which the
consolidated rate for each quarter is due.
Such
bill shall be sent by post under certificate of posting or by courier agency to
the person liable for payment of the consolidated rate, not later than the 31st
day of May." It is true that various provisions of Bombay Act and the Act
under consideration before us applicable to Calcutta, are somewhat similar. However, some of the most out-standing features
of Calcutta Act are not to be found in the Bombay Act.
In the
Act applicable to Calcutta which is for consideration before
us, the tenant, sub-tenant or occupier have to be involved by Public notice and
individual written notices in the course of valuation and assessment of the
"consolidated rate" or tax. Pursuant to the aforesaid public and
individual notices, they have a right to object to the proposed valuation and
assessment. They can also submit returns in response to the above notices. The
annual value is determined on the basis of actual rent and market rent and is
apportioned between the owner and lessor, as the person "primarily
liable" and the tenant, sub-tenant or occupier, who are described as
"persons liable." The provision of sub-section (6) of Section 178
creates an obligation on the municipal Commissioner to supply information, on
payment of fee, to the person "primarily liable" and to "persons
liable" regarding the apportionment of the "consolidated rate"
or tax on the properties among the several occupiers. The "consolidated
rate" so determined for a property is recoverable only from the
"person primarily liable" who is given a right of reimbursement from
the other "persons liable." The consolidated rate is also made
recoverable from the 'persons liable' by attaching their rents payable to the
"person primarily liable" and giving corresponding rights to the
parties to claim adjustment of the tax paid from the quantum of rent.
The
Act applicable to Calcutta also imposes a 'surcharge' as part
of "consolidated rate" or tax of which the whole burden is on the
tenant, sub-tenant or occupier who is putting the premises to non-residential
or commercial use. The burden of this 'surcharge' as part of "consolidated
rate" is only on the person putting the premises to non-residential or
commercial use. The imposition of this surcharge for properties in use for
non-residential and commercial purposes with apportionment of that liability only
on persons using the property in the manner aforesaid, is a special feature of
the Act applicable to Calcutta and which makes this provision as also other
provisions to a great extent different from the provisions of Bombay Act which
were considered and the right of appeal in that case was held to be allowable
only on full deposit of property tax for the whole property or building which
is treated to be one unit for valuation and assessment of tax.
We
have noticed the distinguishing features and the scheme of the Act applicable
to Calcutta before us for interpretation and
the Act applicable to Bombay. We have resorted to a reasonable
interpretation of the provisions of Act applicable to Calcutta. We have come to the conclusion
that as tenant, sub-tenant and occupants are "persons liable" with
owner or lessor being the 'persons primarily liable', the former category of
'persons liable' have a right to prefer appeal against proposed valuation and
assessment of "consolidated rate" by deposit of that portion of
"consolidated rate" or surcharge which is found leviable and payable
by them. Such portion of "consolidated rate" and 'surcharge' is
separately determined and ascertainable from the order of assessment and the
demand bills and notices for recovery, if any, issued to the persons
"primarily liable" or "persons liable." The decision of
this Court in the case of Central Bank of India (supra) on the provisions of Bombay Act, therefore, in our opinion, is
distinguishable. In the case before us, the tenants, sub-tenants and occupiers
as "persons liable" have to be recognised as aggrieved parties with
independent right of appeal to them on pre-deposit of portion of a
"consolidated rate" or surcharge, found leviable and recoverable from
each of them.
Other
Grievances:
Incidentally,
a grievance was also raised that the tenants, sub-tenants and occupiers even on
a formal demand on payment of fees, are not being supplied the necessary
details of tax and its apportionment for filing returns, raising objections and
filing appeals. We may only observe that there can be no general direction for
redressing such grievances. We have found from the provisions, as construed by
us, that they create an obligation on the concerned authorities of the
Corporation to provide necessary information on assessment and apportionment of
tax between 'persons primarily liable' and 'persons liable.' If there is in a
given case refusal on the part of Corporation authorities to discharge their
statutory liability in the matter of furnishing requisite information to the
persons liable to pay the tax, the aggrieved parties have to take recourse to
the remedies provided in law for compelling compliance of the provisions of the
Act.
Challenge
to Section 231:
The
appellants have also challenged the applicability of the provisions contained
in Section 231 of the Act . it is contended that Section 231 creates a legal
fiction by which ''tax' is to be treated as a 'rent'. If the tax is treated as
rent with the right given to the landlord to recover it as rent, the provisions
of Tenancy Act would get attracted without their being any mention of
applicability of Tenancy Act to the provisions of the Act under consideration.
It is submitted that a provision which deems 'tax' as 'rent' for the purpose of
recovery by the landlord for payment to the Corporation or for his own
reimbursement where he has already paid the whole amount of tax, creates a
situation whereby although the apportionment and quantum of demand is disputed
by the tenant, he has to face proceedings for recovery of tax as 'rent' and
face the danger of eviction under the provisions of the Tenancy Act.
It is
submitted that the provisions of the Act under consideration do not contain any
guidelines to indicate as to what extent the provisions of the Tenancy Act
would be attracted to portion of tax leviable on the tenant which is
fictionally treated as 'rent'.
We
have to examine the provisions of Section 231 of the Act in the light of the
scheme of the Act. Section 231 of the Act reads thus:
"Mode
of recovery - If any person primarily liable to pay any consolidated rate on
any land or building and is entitled to recover any sum from an occupier of
such land or building, he shall have, for recovery thereof, the same rights and
remedies as if such sum were rent payable to him by the person from whom he is
entitled to recover such sum." We find that the machinery provisions for
assessment and recovery of tax basically involve the owner or the lessor who is
'primarily liable' for the tax on property although in the course of assessment
and recovery of portion of tax from the tenants, sub-tenants or occupants,
their involvement is also directed. It is with the purpose to make procedure of
recovery of tax simpler that the owner or the lessor is proceeded against as the
"person primarily liable." The owner or lessor of the property is
'primarily' required to satisfy the demand towards tax with right to recover it
from the tenant, sub-tenant or the occupant. If the landlord or the owner is
obliged to make payment of whole amount of tax inclusive of his own share and
share of the tenant, sub-tenant or the occupant, the owner or lessor has to be
conferred with power to recover the portion of tax payable by the tenant,
sub-tenant or occupant who is actually enjoying the property and putting it to
use for commercial or non-residential purpose. The legislature has taken note
of the fact that a large number of properties in Metropolitan city of Calcutta are in occupation of tenants, sub-
tenants or occupants on a comparatively small amount of rent or lease money. In
such situation to impose entire burden of tax on the owner or lessor, would be
inequitable, more so when the tenancy law does not allow increase in rent
beyond a particular limit and the right of eviction of the landlord is
restricted to the grounds under the Tenancy Act. By the impugned provisions of
the Act, therefore, the legislature has thought of apportioning the tax burden
between owner or the lessor as one party and the tenant, sub-tenant or occupier
as the other parties. The whole amount of tax is recoverable from the lessor
and may also be recovered from the tenant or sub- tenant through attachment of
the rent. In case where the lessor or landlord has paid the whole tax including
the portion of tax payable by the tenant or sub-tenant, the landlord has to be
equipped with power to get himself reimbursed by recovery of the portion of tax
paid by him on behalf of the tenant.
Section
231 of the Act, therefore, creates fiction that the 'tax' apportioned on the
tenant would be treated as 'rent' and would be recoverable as such. The word
'rent' has not been defined in the tenancy law and this court has taken note of
this legal position in the case of Puspa Sen Gupta vs. Susma Ghose [1990 (2)
SCC 651] which arose out of the provisions of Tenancy Act applicable to West
Bengal. Rent is a compendious expression which may include lease money with
service charges for water, electricity and other taxes leviable on the tenanted
premises.
The
provisions of the Tenancy Act merely enable the landlord to make a demand of
arrears of rent and in default of the payment of the same sue the tenant for
recovery of rent or eviction on the ground of non-payment of rent despite
demand.
The
tenant can get protection against eviction on the ground of arrears of rent
only if he makes requisite deposit of the arrears in the manner laid down in
the provisions of the Tenancy Act. A provision to fictionally treat 'tax' as
'rent' is necessitated because in the absence of such a fiction in Section 231
of the Act, the landlord would be compelled to pay the whole amount of tax
which is recoverable from him under the Act and would be left to an expensive
and cumbersome remedy of filing a civil suit for recovery of such tax paid on
behalf of the tenant, sub-tenant or occupant. Such a fiction is required to be
incorporated under Section 231 of the Act because a private party cannot
recover tax. If a lessor is obliged to pay a portion of tax leviable on the
tenant, the landlord can recover the same not as 'tax' but only as part of
'rent.' The fiction created by the legislation in Section 231 to treat 'tax' as
'rent' has to be taken to its logical conclusion. The Act under consideration
and the Tenancy Act both are State Legislations. No question arises of legislative
incompetence.
There
does not appear any inter se conflict between the two Acts. Both have to be
read and applied harmoniously to achieve the legislative intent in the two
enactments. The contention based on Section 231 of the Act, therefore, also
does not commend to us and is rejected.
Disproportionate
Tax Liability:
In the
course of hearing some calculation charts for illustration were placed before
us to demonstrate that tax structure under Section 171 has been made in such a
manner that although a tenant may be occupying a small portion of rented
premises with normal rent but on valuation in relation to the entire building
fetching rent exceeding Rs.18,000/- for the purpose of determination of tax,
the resultant liability works out higher on the tenant and much lower on the
landlord because latter's liability is restricted to valuation based on actual
rent from the premises. It is argued that such a result, based on tax structure
with a much higher burden on the tenant compared to the landlord being the
'person primarily liable' for payment of tax, is inequitable and unjust. It is
also against the concept of imposition of property tax on owners of properties
in the local area.
We
have already taken note of the stand of the Corporation that premises i.e.
lands and buildings in metropolitan town of Calcutta are mostly occupied on meagre rents from the landlords, yet, in those
tenanted premises commercial and non-residential activities are going on a
scale which, requires more and more civic amenities to be provided by the
Corporation. Since the landlords are getting only small rents and the occupants
are actually putting the premises to more beneficial use sometimes generating
huge incomes, a just tax structure should put lesser burden of tax on the
landlord than on the tenants who are in actual occupation. The grievance,
therefore, raised that the tax burden is much higher on the tenants,
sub-tenants or occupants than on landlords, according to us, is not legitimate
and is no ground to assail the impugned provision.
Discriminatory
treatment of rented premises governed by West Bengal [Tenancy] Act and others:
One
additional ground raised on behalf of the appellants is that provisions of the
Tenancy Act are not attracted to all tenanted properties and only properties of
which rent is less than Rs.3,000/- per month are covered by Tenancy Act. On the
above legal position the contention advanced is the rented premises for which
the Tenancy Act is applicable, property tax can be included in "Fair rent"
as defined under the Tenancy Act but to accommodations and premises not covered
by Tenancy Act, Property tax is not included in rent and there is no obligation
on such landlords occupying tenanted premises on rent which is more than
Rs.3,000/- per month, to pay property tax directly or through the landlord in
accordance with the Tenancy Act. It is, thus, contended that the provisions of
the Act create a discriminatory situation between tenants paying less than
Rs.3,000/- per month rent and covered by Tenancy Act and tenants paying more
than Rs.3,000/- per month rent and falling out side the provisions of the
Tenancy Act.
We
have examined the scheme of the Act and we find that in apportioning the burden
of tax on landlord and tenant a uniform scheme or tax structure has been
evolved under the Act on the basis of actual and notional rental value of the
premises. The liability of the landlord towards tax is limited to the valuation
based on actual rent received and the assessment made of the tax based on letting
value of the premises is the liability of the tenant/sub-tenant or occupier.
Merely
because Tenancy Act is attracted to accommodations with rent less than
Rs.3,000/- per month and not to other accommodations having higher rent, does
not create any dis- similar situation in application of the Act to various
categories of tenants paying rent more or less than Rs.3,000/-. The portion of
tax liable to be paid by the occupant or tenant is not directly recovered by
the Corporation from them but is recoverable through the landlord and the
landlord has been given right of reimbursement by demanding it from the tenant,
sub-tenant or the occupant. For recovering such portion the tax payable by the
tenant, sub-tenant or occupant, which has been paid by the landlord, is deemed
to be "rent" only for the limited purpose of its recovery. The modes
of recovery are by a demand notice under the Tenancy Act and if necessary by
filing an eviction suit. Resort to remedy before the regular court is also not
prohibited. On this aspect of apportionment of tax and mode of recovery of tax,
the Act does not make any discrimination between tenants of premises covered by
the Tenancy Act and others not covered by the said Act.
Conclusion:
As a
result of the discussion aforesaid, we find no vice in any of the provisions of
the Act although we have considered it necessary to interpret the provisions
harmoniously for better application of the provisions of the Act and the
Tenancy Act.
The
various legal provisions assailed before us have been interpreted by us and our
conclusions are as under:
(1) In
view of specific provisions of the Act and as the provisions of the Act impose
burden of tax to an appreciable extent on the tenant, sub-tenant and occupiers
and the tax is liable to be recovered from them through the landlord or
directly by attachment of rent or other coercive modes, the tenants,
sub-tenants and occupants are entitled to an opportunity to participate in the
process of valuation and assessment. They are entitled, therefore to written
notices apart from public notice for assessment, revision of assessment or
amendment of assessment of the 'consolidated rate' or tax. It is also made
clear that pursuant to the public notice or written notice, the returns
submitted by the tenant, sub-tenant or occupier, with regard to determination
of annual value shall be considered by the corporation. The same procedure
would be followed in revision of the annual valuation.
(2) It
is further made clear that non-issuance of public notice or notices and /or
non-service of written notices to the 'persons primarily liable' would not
necessarily invalidate the proceedings of assessment or reassessment or
amendment of the valuation for consolidated rate unless it is established by
the party aggrieved that a serious prejudice was caused to it for want of
notice.
(3)
Under the provisions of the Act since the tenant, sub-tenant or occupier have
to share burden of an appreciable portion of "consolidated rate"
exclusive or inclusive of 'surcharge' in relation to properties used for
non-residential and commercial purposes and as the Act provides for opportunity
of participation to them pursuant to a public notice and written notice in
assessment and reassessment of tax, they have a right of appeal provided under
the Act. It is made clear that tenant, sub-tenant and occupiers held liable for
payment of a portion of tax have a right of appeal on pre-deposit of portion of
tax levied and made recoverable from them.
(4) It
is also made clear that to enable the tenant, sub-tenant or occupier as 'person
liable' to pay 'consolidated rate' they would have a right to obtain necessary
information on payment of requisite fee in accordance with Section 178 of the
Act and Corporation authorities are legally bound to furnish such requisite
information.
In the
result of the detailed discussion aforesaid, we maintain the judgment of the
High Court with the clarification and observations made above. This is further
clarified that the legal position explained by us in this judgment would have
application to pending and future proceedings but not to proceedings under the
relevant chapter of the Act which have already been concluded.
Consequently,
the appeals fail and are dismissed. We leave the parties to bear their own
costs.
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