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Akola Municipal Corporation Vs. Shri Akola Gujrati Samaj - (High Court of Bombay) (14 Feb 2018)

When remedy is available under provisions of Act, jurisdiction of Civil Court is impliedly ousted

MANU/MH/0239/2018

Civil

The question that arises for consideration in this appeal is, whether the suit filed by the Respondent seeking declaration and permanent injunction against the Appellant/Municipal Corporation, in respect of dues towards Municipal tax, was maintainable. The Appellant/Municipal Corporation has relied upon provisions of the Maharashtra Municipal Corporations Act, 1949, particularly Section 406 thereof, to claim that, the jurisdiction of the Civil Court is impliedly ousted and that, therefore, the Civil Court in the present case did not have jurisdiction to entertain the suit filed by the respondent.

By the impugned judgment and order, the District Court has allowed the appeal of the respondent/Public Trust and remanded the matter to the trial Court with a direction to determine the suit afresh on all issues. The District Court has held in the impugned judgment and order that, the grounds raised in the suit by the Respondent/Public Trust cannot be adjudicated by the authority empowered under Section 406 of the said Act and that, therefore, the suit filed by the respondent/Public Trust was maintainable. The District Court held that, when the respondent/Public Trust had challenged the very legality of the tax to be recovered by the Municipal Corporation, such question could be decided by the Civil Court and that it could not be the subject matter of appeal under Section 406 of the said Act. Aggrieved by the said judgment and order of the District Court, the appellant/Municipal Corporation has filed the present appeal.

Section 132(1)(b) of the said Act provided that tax shall not be levied on buildings and lands or portions thereof that are solely occupied and used for public charitable purpose. Section 406 provides for appeals against valuations and imposition of taxes while Sections 407 to 411 provide for a mechanism of further appeals, reference and arbitration.

The provisions of the Act provide a scheme wherein the grievance of the Respondent/Public Trust can be fully taken care of and, therefore, the jurisdiction of the Civil Court is impliedly ousted. In the present case, there is no question of a challenge to the vires of any provision of the aforesaid Act and the claim of the Respondent/Public Trust that the notice and bills issued by the appellant/Municipal Corporation are illegal because the Respondent is entitled for exemption from payment of property tax, is a question that can very well be decided in the mechanism provided as per the aforesaid provisions of the said Act.

The Respondent/Public Trust has filed the civil suit, instead of appeal under Section 406 of the said Act, only to avoid the mandatory deposit of disputed tax claimed by the appellant/Municipal Corporation, under Section 406(2)(e) of the Act, before the appeal can be heard or decided by the Judge. It is for the assessees like the Respondent/Public Trust to demonstrate as to why the grievance sought to be raised by them cannot be addressed under the scheme manifested by provisions of the said Act.

A perusal of the order passed by the trial Court in the present case, would show that much emphasis has been placed by it on the alleged suppression of material by the Respondent/Public Trust as regards its claim of carrying on charitable educational activities in the building in question. An adverse inference seems to have been drawn by the trial Court against the Respondent/Public Trust in that context. The said approach of the trial Court may have been harsh, but, it has correctly reached the conclusion that, the grievance of the respondent/Public Trust can certainly be raised in an appeal under Section 406 of the said Act and further appeal as provided under the Act. On the other hand, the appellate Court in the impugned judgment and order has erred in holding that none of the grounds contended by the Respondent/Public Trust could be agitated under Section 406 of the said Act. While arriving at the said conclusion, the appellate Court has failed to analyse the true nature of the grievance of the Respondent/Public Trust. The appellate Court failed to appreciate that the true nature of grievance raised by the respondent/Public Trust was necessarily required to be analysed for deciding the question as to whether the trial Court had jurisdiction to entertain the civil suit or not.

Once it is found that the true nature of the grievance is such that, it can certainly be raised in an appeal under Section 406 of the said Act, it becomes clear that the jurisdiction of the civil Court is impliedly ousted and that the Respondent/Public Trust is required to exhaust the remedy provided under the above quoted provisions of the said Act. The Respondent/Public Trust is relegated to the remedies available under the provisions of the said Act. Accordingly, the appeal is allowed. The impugned judgment and order is quashed and set aside.

Tags : CIVIL COURT   JURISDICTION   REMEDY  

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