# Rajendra Tyagi & Ors v. State of U.P. & Ors

- **Citation:** (2026) 2 ILRA 392
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-02-25
- **Case number:** Public Interest Litigation (P.I.L.) No. 1427 of 2025
- **Bench:** Arun Bhansali, C.J. Kshitij Shailendra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/rajendra-tyagi-ors-v-state-of-u-p-ors-54246
- **Pages:** 28

## Text

_Characters 0–39,854 of 79,921. This is a partial read: ask again with offset=39854 for what follows._

392 INDIAN LAW REPORTS ALLAHABAD SERIES

16. उपरोक्त त्यों से यह स्पष्ि है कक ववपक्षी सांख्या 6 शासकीय सेवा में कायथरत व्यन्क्त है। ऐसा व्यन्क्त गरीि
एवां ननराधित की िेणी में नहीां आता है। एक शासकीय सेवा में कायथरत व्यन्क्त द्वारा तालाि की िूभम पर कब्जा ककया
जाना ककसी िी िशा में उधचत नहीां कहा जा सकता। ऐसा नहीां है कक तालाि की िूभम पर अनतिमण हिाने का कायथ बिना
ववधधक प्रकिया अपनाए ककए जाना प्रस्ताववत है। इस उद्िेशय से धारा 67, उिर प्रिेश राजस्व सांदहता 2006 के अांतगथत
वाि सांन्स्थत करके ववधधक प्रकार से कायथवाही की गई। ववपक्षी सांख्या 6 ने िार-िार अवसर दिए जाने के उपराांत िी
साक्ष्य प्रस्तुत नहीां ककया तथा अांनतम आिेश पाररत होने के उपराांत अपील के माध्यम से िेिखली आिेश की वैधता को
चुनौती िी िी। िेिखली आिेश अपीलीय न्यायालय से पुष्ि ककए जाने के उपराांत उसके कियान्वयन में अनतिमण
हिाया जाना ककसी िी प्रकार से बिना ववधधक प्रकिया अपनाए हुए ककसी व्यन्क्त का उत्पीडन करना नहीां कहा जा सकता।

17. ऐसी न्स्थनत में ववपक्षी सांख्या 6, जो राजकीय सेवा में होते हुए तालाि एवां खाि गड्ढे की लोक उपयोगी िूभम पर
अनतिमण करने का िोषी पाया गया है, उसे अन्यत्र आवास प्रिान ककए जाने की कोई आवश्यकता नहीां है तथा अन्यत्र
आवास प्रिान ककए जाए बिना िी तहसीलिार सिर िहराइच द्वारा वाि सांख्या 5380 सन् 2018 में पाररत आिेश दिनाांक
27.11.2020, जो अपर आयुक्त द्वारा अपील में पुष्ि ककया जा चुका है, का कियान्वयन सुननन्श्चत कराना ववपक्षी सांख्या
4 का ववधधक उिरिानयत्व है। शासकीय सेवा में कायथरत व्यन्क्त द्वारा सरकारी िूभम पर अनतिमण एक िुराचरण है
तथा ऐसे व्यन्क्त को अन्यत्र वैकन्जपक आवास प्रिान ककए जाने का कोई वैधाननक आधार िी नहीां है।

18. तिनुसार, याधचका स्िीकाि की जाती है। ववपक्षी सांख्या 4 को ननिेश दिया जाता है कक वाि सांख्या 5380 सन्
2018 में पाररत आिेश दिनाांक 27/11/2020 का कियान्वयन ववधधनुसार शीघ्रतापूवथक यथासांिव आज की नतधथ से तीन
माह के िीतर करना सुननन्श्चत करें।
----------
(2026) 2 ILRA 392
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.02.2026

BEFORE

THE HON'BLE ARUN BHANSALI, C.J.
THE HON'BLE KSHITIJ SHAILENDRA, J.

Public Interest Litigation (P.I.L.) No. 1427 of 2025

Rajendra Tyagi & Ors. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Issue for Consideration
Issue pertains whether the determination and fixation of "Minimum Monthly Rate of Rent (MMRR)" by
Municipal Commissioner, forming the basis for assessment and enhancement of property tax in Ghaziabad, is
in conformity with the statutory scheme prescribed u/s 174 of U.P. Municipal Corporations Act, 1959 read with
2 All. Rajendra Tyagi & Ors. Vs. State of U.P. & Ors.
393
R. 4-A and 4-B of U.P. Municipal Corporation (Property Taxes) Rules, 2000, or whether the same suffers from
arbitrariness, illegality, and non-compliance with mandatory statutory parameters, thereby vitiating the
consequent levy of property tax.

Headnotes
U.P. Municipal Corporations Act, 1959 - ss. 2(74), 116, 148, 172, 173, 174 - U.P. Municipal
Corporation (Property Taxes) Rules, 2000 - R. 4-A, 4-B, 4-C - Municipal Law - Revision of
Property tax - Validity of - Determination of annual value - Fixation of MMRR - PIL by
Corporators - Maintainability - The instant Public Interest Litigation arises from a challenge to
the revision and enhancement of property taxes by Ghaziabad Municipal Corporation for the
financial year 2025 - 26 - The petitioners, who are present or former corporators, assail the
impugned actions including the order dated 03.05.2025, notice dated 09.01.2024, and
Resolution No. 139 dated 07.03.2025, contending that the increase in property tax allegedly to
an excessive extent is founded upon an unlawful and arbitrary determination of Minimum
Monthly Rate of Rent (MMRR) - It is their case that such determination was undertaken without
adhering to the mandatory statutory framework under the U.P. Municipal Corporations Act, 1959
and the Rules of 2000, particularly by disregarding relevant factors such as prevailing rental
values and by improperly relying upon circle rates, as well as by introducing impermissible
criteria like road width - The petitioners further allege that the enhancement was effected
without due approval of Corporation's Board and in contravention of prescribed procedures,
including those relating to periodic revision and grant of rebates - The respondent -Corporation,
on the other hand, submits that the MMRR was determined after due survey, classification,
publication, and consideration of objections in accordance with statutory provisions, and that
the revised tax regime seeks to rectify anomalies in the earlier system.

Held: Despite questioning procedural aspects such as issuance of notice, their publication etc, in the writ
petition and supplementary affidavits, submissions on that line were not advanced on behalf of the petitioners
- Even otherwise the Court was convinced that all steps appear to have been taken by the respondents in that
regard - The dispute, therefore, remains qua determination of 'MMRR' and it has to be examined as to
whether such determination is or is not in consonance with the statutory provisions - Further, the petitioners
have not been able to come out with any specific submission or suggestion as to what better methodology or
concrete formula could have been adopted or exercise undertaken by Municipal Commissioner for such
determination - On the face of record that the petitioners never wanted any exercise to be undertaken, rather
they were somehow interested in either maintaining the property tax rates as it were or its
revision/enhancement not based upon any fresh exercise according to law but as per previous arrangement
like 5% per year increase which was almost negligible - The Court neither find any error in determination of
'MMRR' based upon categorization/classification of properties nor any illegality in the impugned decision of
respondents to revise/enhance the property taxes based upon 'MMRR' - The exercise undertaken by
respondents was found to be in consonance with the statutory provisions requiring no interference, thus,
petition lacks substance, dismissed. [Paras 46, 55, 68, 76] (E-13)

Case Law Cited
 Dipak Babaria and another v. State of Gujarat and others: (2014) 3 SCC 502 - referred to

Shiv Sewak Singh and others v. State of U.P. and others: 2012 (7) ADJ 724; Akola Municipal Corporation
and another v. Zishan Hussain Azhar Hussain and another: 2025 SCCOnline SC 2729 - followed

Commissioner of Income Tax, Mumbai v. Anjum M.H. Ghaswala and others: (2002) 1 SCC 633 -
distinguished

List of Acts
U.P. Municipal Corporations Act, 1959; U.P. Municipal Corporation (Property Taxes) Rules, 2000
394 INDIAN LAW REPORTS ALLAHABAD SERIES
List of Keywords
Public Interest Litigation; Property taxes; Corporators; Public Interest; Enhancement/revision of tax; Municipal
Corporation/Nagar Nigam; Board/Executive Committee; Municipal Commissioner; U.P. Municipal Corporations
Act, 1959; Annual rental value; Minimum Monthly Rent Rate (MMRR); Determination/fixation of MMRR; Levy
and assessment of tax; Classification / categorisation of properties, Developed / Normally developed /
Backward / Slum areas; Circle rate; Carpet area/covered area; Publication of notice; Invitation and disposal of
objections; Representative capacity; Arbitrariness; Illegality; Violation of Article 14; Survey; Ward-wise and
Nature wise classification; Road width criteria; Master Plan; Rebate on property tax; Executive decision; Board
resolution, Implementation of revision of tax; Anomaly in earlier system; Self-assessment; Compliance with R.
4-A, 4-B, 4-C; Validity of determination; Petition lacks substance; Petition dismissed.

Case Arising From
ORIGINAL JURISDICTION: Public Interest Litigation No. - 1427 of 2025

From the Judgment and Order dated 03.05.2025, notice dated 01.04.2024, Resolution No. 139 dated
07.03.2025 issued by the Municipal Corporation, Ghaziabad

Appearances for Parties
Advs. for the Petitioner:
Samir Sharma (Senior Advocate), Himanshu Agrawal

Advs. for the Respondent:
Manish Goyal (A.A.G), A.K. Goyal, (A.C.S.C), Shashi Nandan (Senior Advocate), Shreya Gupta, Raghuvansh
Misra, Sunil Dutt Kautilya, Satyavrat Sahai

(Delivered by Hon'ble Kshitij Shailendra, J.)

1. Heard Shri Samir Sharma, learned Senior Counsel assisted by Shri Himanshu Agrawal,
Advocate appearing for the petitioners, Shri Manish Goyal, learned Additional Advocate General
for respondents no.1 and 2 and Shri Shashi Nandan, learned Senior Counsel assisted by Ms. Shreya
Gupta, Advocate appearing for respondents no. 3 to 5.

PRAYERS IN WRIT PETITION

2. The petitioners, who are three (3) in number and are either Ex or present Corporators in the
Municipal Corporation, Ghaziabad (in short 'the Corporation' or 'Nagar Nigam'), also having held
different offices therein, have filed the present writ petition in purported public interest with a
prayer to quash the order dated 03.05.2025, notice dated 01.04.2024, Resolution No. 139 dated
07.03.2025 issued by the Corporation, whereby revision in property taxes has been approved.
Further prayer has been made to direct the Corporation to extend the benefit of rebate on property
taxes as provided under Section 174(2)(a) of U.P. Municipal Corporations Act, 1959 ('the Act');
further restraining the Corporation from implementing the decision dated 15.02.2024 of the
Executive Committee of the Corporation with a further direction to extend the benefit of rebate on
early deposit of property tax.

3. The matter was heard on various dates and, on the last day of final hearing, a Civil Misc.
Amendment Application No. 7 of 2026 was pressed on behalf of the petitioners, wherein prayer
2 All. Rajendra Tyagi & Ors. Vs. State of U.P. & Ors.
395
was made to read the date "09.01.2024" in place of "01.04.2024" in the first relief claimed in the
petition.

4. For the reasons stated in the affidavit supporting amendment application, the same is
allowed. Accordingly, the notice impugned shall be treated as dated 09.01.2024 in place of
01.04.2024.

FACTS OF THE CASE

Pleadings on behalf the petitioners (Writ Petition and Supplementary Affidavits)

5. The petitioners have claimed themselves to be public spirited citizens having instituted
certain petitions earlier before this Court and, by referring to various provisions of the Act, mainly
sections 148, 172, 173, 174, 207 to 213, 221-B and Rules 2, 3, 4, 4-A, 4-B, 4-C, 5, 5-A and 7 of
U.P. Municipal Corporation (Property Taxes) Rules, 2000 ('the Rules'), it is pleaded that in the
meeting of the Board of Nagar Nigam, Ghaziabad ('the Board') on 07.06.2022, the matter regarding
increase in property taxes in accordance with the DM circle rate was discussed, however, after due
discussion, it was unanimously resolved that the matter be put up again for discussion in the next
meeting of the Board. Subsequently, in the meeting held on 16.09.2022, the aforesaid resolution
was never placed before the Board, instead the Municipal Commissioner orally informed the Board
that the proposal had already been forwarded to the State Government, to which the petitioners
raised serious objections.

6. In the meeting of the Board held on 07.01.2023, again, no proposal regarding enhancement
of the property taxes was put up for discussion, however, the Board suo-moto took up the matter
and a decision was taken to increase the property taxes by 10%. The said resolution of the Board
was implemented on 01.04.2023. Thereafter, a notice was published on 09.01.2024 in local news
papers in Ghaziabad proposing enhancement of property taxes for residential properties within
Municipal limits of the Nagar Nigam in 100 wards on the basis of DM circle rates, whereby
objections were invited. Prior to publishing the notice/proposal dated 09.01.2024, the same was
neither placed in the meeting of the Board nor were the members of the Board informed about any
such proposal.

7. In the meeting of the Executive Committee of Nagar Nigam held on 15.02.2024, members
unanimously objected to the enhancement of property tax and resolved that till the matter was taken
up before the Board, recovery of property tax according to the new rates be not made, however, the
aforesaid proposal was finalized and published in newspapers but the same was not given effect to
during the year 2024-25. Thereafter, in the meeting of the Board held on 09.10.2024, vide
resolution no. 54, the proposal for enhancement of property tax on the basis of DM circle rates was
rejected but, vide letter dated 26.10.2024 of the Municipal Commissioner, resolution dated
09.10.2024 was forwarded to the State Government. In response to the same, vide letter dated
06.03.2025 issued by the under Secretary, Anubhag Nagar Vikas, Lucknow, it was indicated that
the property taxes be fixed according to the minimum rental value in accordance with the
provisions of section 174 of the Act and the Rules.
396 INDIAN LAW REPORTS ALLAHABAD SERIES

8. Subsequently, a meeting of all Zonal Incharges and Tax Superintendents was held on
03.05.2025 for the purposes of determination of property taxes for the Financial Year 2025-26 in
accordance with the newly prescribed rates of tax and it was decided that property taxes be
determined for residential buildings on the basis of carpet area and for non-residential buildings, on
the basis of the covered area in accordance with the newly prescribed rates. By the said order dated
03.05.2025, a decision was taken to implement the enhanced property tax rates w.e.f 01.04.2025.

9. It is further pleaded that, earlier, the Board, vide resolution dated 07.06.2016, had decided
to grant rebates providing 25% rebate on depositing house tax till the month of August, 15% rebate
on deposit till September, 10% rebate on deposit till December and 5% rebate on deposit till
January but, due to the Covid-19 pandemic in the year 2021, benefit of 20% rebate was extended
till the month of October (instead of August). However, in the meeting of the Board held on
07.06.2022, the Municipal Commissioner informed that the rebate was discontinued and the earlier
rates had been revived. Nevertheless, the Board unanimously passed the resolution that 20% rebate
be extended for deposit of house tax till the month of September, while 15% rebate to be removed.
Accordingly, necessary orders were issued and the same rates of rebate continued for the Financial
Year 2022-23 and 2023-24, however, in the meeting of the Executive Committee held on
15.02.2024, vide resolution no. 38, the 20% rebate, which was being granted for timely deposit of
house tax till the month of September, was reduced till the month of July only, which decision is
illegal, arbitrary and unreasonable as the same was never approved by the Board.

10. It is further pleaded that the Board, vide resolution no. 139 dated 07.03.2025, has taken a
decision that the width of the road for the purposes of calculation of rental value be fixed by taking
into account the area of parking, green belt, drains, etc. As fixation of width of the roads is done in
accordance with the Master Plan which is duly notified by the concerned Development Authority
under U.P. Urban Planning and Development Act, 1973 and approved by the State Government,
the resolution dated 07.03.2025 to the extent it directs fixation of such width by adding the area of
parking, green belt, drains, etc, is illegal, arbitrary and without jurisdiction.

11. It is further pleaded that even though, since the year 2001 onwards, in accordance with the
resolutions of the Nagar Nigam, rate of increase of property tax was to the extent of 10% every two
years, by means of the impugned action, it has been increased by approximately 300% w.e.f
01.04.2025 and without any approval of the Board. The increase of property taxes is said to be
exorbitant, arbitrary, unreasonable, violative of Article 14 of the Constitution of India, in teeth of
section 174 (2) (a) of the Act, without jurisdiction and against public interest.

12. By means of supplementary affidavit and second supplementary affidavit, it has been
pleaded that prior to impugned order dated 03.05.2025 or implementing the revised rates of
property tax w.e.f. 01.04.2025 for the year 2025-26, neither any public notice was published under
Rule 4-A nor the procedure prescribed under Rules 4-A and 4-B was followed. A meeting of the
Board was convened on 30.06.2025 in which the agenda to consider enhancement of the property
tax on the basis of DM circle rates was placed but the proposal was unanimously rejected. Despite
the said decision, the respondents are issuing and sending bills of property tax at the increased rates
due to which, the Corporators have started protests and dharna etc.
2 All. Rajendra Tyagi & Ors. Vs. State of U.P. & Ors.
397

Pleadings on behalf the respondents (Short Counter Affidavit and Supplementary Short
Counter Affidavit)

13. Whereas, no counter affidavit has been filed on behalf of State of U.P., short counter
affidavit and supplementary short counter affidavit have been filed on behalf of respondent no. 4Corporation stating therein that as per statutory provisions, the Municipal Commissioner,
Ghaziabad classified and categorized the localities situate within the entire municipal limits into
Developed (A), Normally Developed (B) and Backward Area/Slum (C) categories based upon the
DM circle rates in effect at that time. The Corporation conducted a survey of the then minimum
monthly rent rates (in short 'MMRR') for buildings and lands in these areas. It calculated the
monthly rent rates in per square foot unit and determined its average. For example: for developed
areas (category-A), the average monthly rent was calculated at Rs. 13/- per square feet and was
notionally taken as 4/- for the purposes of imposition of property tax; for normally developed
(category-B), it was calculated as Rs. 11/- per square feet and was notionally taken as Rs. 3.5; and
for backward areas/slum (category-C), it was calculated as Rs. 8/- per square feet and was
notionally taken as 3/-.

14. It is further pleaded that the monthly rent rates, so classified and categorized, were
published in the news dailies, having wide circulation in the city and objections were invited. Total
318 objections were received, they were heard and disposed of by the committee constituted as per
the rules. The petitioners had also lodged their written objections dated 16.02.2021 and 20.02.2021,
they too were heard and their objections were also duly disposed of. The monthly rent rates
determined by Corporation were presented in the meeting of Executive Committee dated
29.04.2022 in the form of proposal no. 206. Thereafter, it was presented in the meeting of the
House dated 21.05.2022 but discussion thereon was deferred for the next meeting. Thereafter, in
the meeting dated 07.06.2022, vide proposal no. 492, it was decided by majority that the tenure of
the present House was very short, therefore, it should be placed for discussion in the next
constituted House.

15. It is further pleaded that regarding implementation of revision of taxes, the then Municipal
Commissioner requested for guidance from the Principal Secretary, Urban Development
Department, Government of Uttar Pradesh, vide office letters dated 16.06.2022 and 06.10.2023, in
response whereto, Urban Development Department directed the Municipal Commissioner to take
action as per the Rules at his own level as per the powers contained in Rules 4-A and 4-B.
Thereupon, the Municipal Commissioner, acting in the interest of the Corporation and following
the prescribed procedure, made final publication on 09.01.2024, to be effective from 01.04.2024.

16. It is further pleaded that the homeowners/city dwellers/taxpayers of Ghaziabad started
depositing tax on the basis of new rates without any objection, revenue of Rs. 38.67 crores was
collected under the new regime during the financial year 2024-25 and more than Rs. 65 crores have
been collected so far in the financial year 2025-26.

17. It is further pleaded that the last exercise for determination of annual rental value was
carried out in the year 2001. The determination so made was permitted to form basis for imposition
of property tax uptil the year 2015. In the year 2015, the rental values determined in the year 2001
398 INDIAN LAW REPORTS ALLAHABAD SERIES
were enhanced by 10%, thereafter, the same were further enhanced by 5% in the year 2016, by
another 10% in the year 2018, by 15% in the year 2021 and by 10% in the year 2023.

18. Further stand has been taken that the previously determined monthly rent rates had various
anomalies, like the provisions contained in the Rules regarding application of category-wise
monthly rent rates were not being followed, one uniform rate was being made applicable in fully
developed posh areas, normally developed areas and backward areas/slums, which was not in
accordance with the provisions of the Act and the Rules, wherein there is a provision for fixing the
minimum monthly rent per square foot unit of carpet area but, under the old regime, the rates for
carpet area and covered area were fixed separately, such that carpet area rates were higher than
covered area rates. Further, taxation of residential buildings was being done according to the
covered area rates and taxation of the non-residential buildings was being done according to the
carpet area rates, whereas the statutory mandate is to determine the tax of non-residential buildings
according to the covered area and that of residential buildings according to the carpet area.

19. Further stand is that the new tax rates remove anomalies in the past regime and determine
the rates according to the specific area, width of the road, location of the building in
developed/undeveloped/backward/rural/urban areas, so that the disparity can be removed. The
determination based on proper categorization of areas and survey of prevalent rent rates in each
area is as per the Act and the Rules and that the prescribed procedure has been fully followed.

Rejoinder affidavits (Rejoinder and Supplementary Rejoinder Affidavits)

20. Stand of the petitioners in these affidavits is that in case the decision taken by the
Corporation vide resolution no. 139 dated 07.03.2025, whereby the width of the roads on which the
property is situated is taken into account, annual value would be calculated by adding the green
area, drains, parks etc. falling between the property and road and its effect would be that it would
inflate the annual value of a property which comes within the category of a slum (in case there is a
public drain or green belt adjacent to the road in front of the slum) while, on the other hand, the
annual value of properties in a posh colony would remain the same. It amounts to treating unequals equally on the basis of increasing/decreasing the width of the road on which the property is
situated, thereby increasing or decreasing the annual value.

21. It is further stated that section 148 of the Act specifically provides a time period within
which the property taxes have to be revised/implemented. If the decision to increase the property
tax on the basis of DM circle rates was taken in the year 2022, the said decision could not be
implemented in the year 2025-26. Admittedly, the 'MMRR' per square foot was revised in
Ghaziabad, lastly in the year 2023, the same could not have been revised just the next year in 2024
(for the year 2024-25).

22. As far as the contention of the respondent no.4 that some amount as per revised rate has
been deposited by some property owners for the year 2025-26, stand is that the same may have
been done only due to ignorance on the part of the property owners regarding the resolutions
passed by the House of the Corporation.
2 All. Rajendra Tyagi & Ors. Vs. State of U.P. & Ors.
399

SUBMISSIONS ON BEHALF OF THE PETITIONERS

23. Though, as per pleadings contained in the writ petition and supplementary affidavits,
procedural aspects as regards issuance of notices, their publication etc were indicated, during the
course of arguments, submissions on that line were not advanced by learned Senior Counsel
appearing for the petitioners. He has, however, made vehement submissions that as per Section
173(2) of the Act, corporation taxes can be assessed and levied in accordance with the provisions of
the Act and the Rules framed thereunder and though Section 173(2) provides that the taxes shall be
levied on the annual value of buildings or land, in the present case, determination of annual value is
erroneous and in teeth of the provisions of Section 174 read with Rule 4-A.

24. Elaborating his submissions, it has been argued that whereas annual value, in case of a
building or land, means twelve (12) times of the value arrived at on multiplying the carpet area of
the building or the land by applicable 'MMRR' per square foot of carpet area, in the present case,
such determination has not been made according to the provisions contained under Section
174(1)(b) read with Rule 4-A and no exercise has been undertaken by the respondents in
consonance with the said provisions.

25. It is further contended that whereas Rule 4-A provides that 'MMRR' is to be worked out
for every group of buildings/land within a ward having regard to circle rate fixed by the Collector
for purposes of the Indian Stamp Act, 1899 and the current 'MMRR' in the area for such building or
land, the respondents have made determination only based upon the circle rates fixed by the
Collector and no computation/determination has been made having regard to the current 'MMRR'.
It has further been argued that whereas Section 174(1)(b) provides that 'MMRR' may be fixed once
in every two years by the Municipal Commissioner, in the instant case, the last revision was done
w.e.f. 01.04.2023, however, the impugned determination/ enhancement has been made effective
w.e.f. 01.04.2024, i.e. within one year without waiting for expiry of two years period and, hence,
for this reason alone, the impugned notice/order/resolution is liable to be set aside.

26. It is further submitted that though, vide Resolution no. 38 passed in the Board Meeting
dated 15.02.2024, decision to grant rebate in different percentages was unanimously passed, no
rebate is being provided by the respondents while issuing demand bills and, therefore, the
Corporation is not obeying its own decision. It is further submitted that the Municipal
Commissioner has attempted to justify impugned determination by categorising properties of
Ghaziabad in different categories/classes based upon the width of road, but since 'road' has not
been defined under the Act but only word 'street' has been defined, the respondents have no
authority to make any such classification/categorisation, which is beyond their competence and also
dehors the provisions of the Act itself.

27. By referring to Resolution No. 139 passed in the meeting dated 07.03.2025, it has been
submitted that the respondents have illegally and arbitrarily included road, footpath, divider, central
verge, green belt, parking space, service road, drain/mini drain etc. while prescribing 'MMRR' for
different categories, which determination is not contemplated under the Act, inasmuch as it is only
the Development Authority or the Government which has competence to determine width of the
road and to decide about various parameters to be included in the said width. The very Resolution
400 INDIAN LAW REPORTS ALLAHABAD SERIES
No. 139 is, therefore, said to be illegal and also consequential determination based upon the
categorisation/classification so as to arrive at 'MMRR'.

28. Further submission has been made that as per Section 174(1)(b), three (3) components
compositely determine annual value of building/land, i.e. the carpet area, 'MMRR' and the figure
'12' by which the carpet has to be multiplied and, out of these three components, two (2) are static
and the only variable component is 'MMRR' and, unless this variable component is determined
strictly in accordance with the provisions of the Act and the Rules, figure of consequential property
tax would be erroneous and, therefore, the respondents were under statutory obligation to determine
'MMRR' wisely, carefully and in accordance with law and not in an arbitrary manner.

29. Reliance has been placed on behalf of the petitioners on the following judgments:-

(i) Dipak Babaria and another Vs. State of Gujarat and others: (2014) 3 SCC 502;

(ii) Commissioner of Income Tax, Mumbai Vs. Anjum M.H. Ghaswala and others:
(2002) 1 SCC 633

SUBMISSIONS ON BEHALF OF THE RESPONDENT-CORPORATION AND ITS
OFFICERS

30. Per contra, learned counsel for the respondent-Corporation and its Officers has made
submissions that the controversy involved in the petition is only about 'MMRR' and not about rate
of property tax. Elaborating his submissions, it is contended that as per Section 148 of the Act,
power to determine rates of taxes lies with Corporation, taxes are to be imposed as per Sections 172
and 173 of the Act and determination of 'annual value' is the sole prerogative of the Municipal
Commissioner. Reference has also been made to Rules 2(k) and (l) to address on the definition of
'annual value' and monthly rate and submission has been made that the Municipal Commissioner
has followed the statutory mandate contained under Rule 4(1) while making 'ward-wise and naturewise' classification of properties by forming nine (9) groups. Rules 4-A, 4-B and 4-C were read
with vehemence to show strict compliance done by the Municipal Commissioner.

31. As far as the steps undertaken by the Municipal Commissioner so as to arrive at the
impugned decision, submission has been made that in the year 2020, every locality in every ward
was categorized into three categories: Developed Areas (A), Normally Developed Areas (B) and
Backward/Slum Areas (C) based upon the DM circle rates. A team of Nagar Nigam officials was
deputed by the Municipal Commissioner to carry out a survey of every locality in every ward of
District Ghaziabad for determination of 'MMRR' of each category A, B and C.

32. It is further contended that on 05.02.2021, the provisionally determined 'MMRR' were
widely published in two reputed newspapers of the District and objections were invited from the
masses and a detailed notification was also published on the official website. On 26.04.2022, total
318 objections were received. Petitioner nos. 1 and 2 also filed their objections. All the objections
were heard by a duly constituted Committee and were disposed of by reasoned and speaking
orders. The outcome of the decision taken on the objections of petitioners no.1 and 2 was duly
2 All. Rajendra Tyagi & Ors. Vs. State of U.P. & Ors.
401
communicated to them. On 29.04.2022, the provisionally determined 'MMRR' were placed before
the Board in its meeting, vide agenda no. 206, however, discussion on it was postponed uptil the
next meeting. On 21.05.2022, the provisionally determined 'MMRR' were once again placed before
the Board, however, no discussions were made qua such determination.

33. It is further contended that on 07.06.2022, discussion on the provisionally determined
'MMRR' was once again postponed by the Board for the next session. On 16.06.2022, Municipal
Commissioner intimated the Principal Secretary, Urban Development about the exercise carried out
by him under section 174 of the Act and determination of 'MMRR' reached by him. When
Municipal Commissioner did not receive any response to his letter dated 16.06.2022, he again
wrote to the Principal Secretary on 06.10.2023 asking for guidance in respect of exercise carried
out under section 174. On 27.10.2023, Under Secretary to the State Government required the
Municipal Commissioner to carry out determination of 'MMRR' at his own level in accordance
with provisions of section 174 and Rules 4-A and 4-B. On 09.01.2024, final publication of the
revised rental values was made in two reputed newspapers dailies and the same were made
effective from 1.4.2024.

34. It is further contended that on 15.02.2024, the Executive Committee of the Nagar Nigam
resolved to keep the newly determined 'MMRR' in abeyance for the time being, consequently its
implementation was suspended. Thereafter, on 09.10.2024, the Board passed a resolution bearing
No. 54 rejecting the proposal for enhancement of property tax on the basis of DM circle rates. On
26.12.2024, Municipal Commissioner intimated Principal Secretary, Urban Development,
Government of U.P. about the resistance being made by the Board and sought his guidance. On
10.01.2025, Under Secretary to the Government of U.P. forwarded the letter of the Municipal
Commissioner dated 26.12.2024 to Director, Nagriya Nikay Nideshalaya, U.P. Lucknow and
sought its report/comments in the matter.

35. On 28.01.2025, the Secretary, Financial Resources Development Board submitted a
detailed report to the Government opining that the resolution no. 54 dated 09.10.2024 passed by
Nagar Nigam Board is without any authority of law and is legally unsustainable. On 06.03.2025,
based upon the aforesaid report, the Under Secretary to the Government of U.P. responded to the
letter of the Municipal Commissioner dated 26.12.2024 requiring him to determine the monthly
rental values in accordance with section 174 of the Act of 1959 and Rules 4-A and 4-B of the
Rules, 2000, at his own level.

36. It is further contended that Nagar Nigam started assessing property tax as per the new
regime. On 07.03.2025, its Board passed a fresh resolution taking into account the opinion of the
State Government dated 06.03.2025 and accepting the determination of 'MMRR' done by the
Municipal Commissioner. On 07.03.2025, the Board passed resolution no. 139 resolving to
categorize localities in each ward on the basis of the width of the road indicated in the Master plan
and, in its absence, as per the sanctioned map of Awasiya Yojna. On 30.06.2025, the Board
convened a special session and once again passed a resolution rejecting the adoption of a 'MMRR'
determined by the Municipal Commissioner under Section 174.
402 INDIAN LAW REPORTS ALLAHABAD SERIES

37. As regards submissions made on behalf of the petitioners that the Municipal
Commissioner was not competent to prescribe 'MMRR' based upon width of the road, learned
counsel for the respondents has made submissions that as per Section 2(74) of the Act, 'street'
includes road also and, therefore, contrary submission made has no substance.

38. It is further contended that during the course of ward-wise categorization of localities, for
developed areas falling under Category (A), the rent per square foot of carpet area varied from
Rs.6/- to Rs.17/-, for normally developed areas, it varied from Rs.5/- to Rs.20/- and for
backward/slum areas, the range was from Rs.4/- to Rs.11/-. Reference was made to a table
appended as Annexure SCA-2 to the short counter affidavit indicating that an average of the
monthly rent per square foot qua all the three categories was separately taken in the manner that for
developed areas, the average figure was indicated as '13', for normally developed areas, the figure
was shown as '11' and for backward/slum areas, it was indicated as Rs.8/-.

39. On a pointed query made by the Court from the learned counsel appearing for the
Corporation that when 'MMRR' was shown to be based upon the average figures taken as 13, 11
and 8, as to why the said figures were further brought down respectively to Rs. 4, 3.5 and 3,
submission was made that the 'lowest' figure of rent for all categories A, B, and C was respectively
Rs. 6, 5 and 4 and the Municipal Commissioner, in his own wisdom, thought it proper to bring
down the 'MMRR' even below the lowest figures and, accordingly, indications were made in the
public notice dated 09.01.2024.

40. As far as the submissions made on behalf of the petitioners that since Section 174(1)(b)
read with Rule 4-A obliges the Municipal Commissioner to determine the 'MMRR' once in every
two years and, therefore, impugned exercise of revising the same within one year is unsustainable,
it has been argued on behalf of the respondents that previous exercise under the said provisions was
undertaken only in the year 2001 and not thereafter and, therefore, challenge laid to the impugned
action on this ground, has no substance. Submission is that the 'MMRR' was kept intact since 2001
and it was only since 2015-16 that the same was increased to Rs. 1.10 and, then, in the year 2018, it
was increased to Rs. 1.27, thereafter in the year 2021, the figure reached to Rs. 1.46 and, lastly,
w.e.f. 01.04.2023, the 'MMRR' was indicated as Rs. 1.61; however, the said increment was not
based upon any statutory exercise under Section 174(1)(b) read with Rule 4-A, rather it was a
percentage increase based upon wisdom of the Commissioner and periodic decisions taken by the
Board.

41. Lastly, it has been contended that the petitioners being Ex or present Corporators of the
Corporation, they are bound by the decision of the Board and any action or stand taken by them
against Board's decision cannot be made subject matter of a petition filed in purported public
interest. Submission is that the petition has been filed by the petitioners only to settle their political
scores with one or the other authority of the Corporation and, therefore, the same deserves to be
dismissed with costs.

42. Reliance has been placed on behalf of the respondents on the following judgments:-
2 All. Rajendra Tyagi & Ors. Vs. State of U.P. & Ors.
403

(i) Shiv Sewak Singh and others Vs. State of U.P. and others: 2012 (7) ADJ 724;

(ii) Akola Municipal Corporation and another Vs. Zishan Hussain Azhar Hussain
and another: 2025 SCCOnline SC 2729

SUBMISSIONS ON BEHALF OF THE STATE

43. Shri Manish Goyal, learned Additional Advocate General, has made submissions that as
per Section 174(1)(b) read with Rule 4-A, Municipal Commissioner is the competent authority to
determine 'MMRR' and based thereupon, property taxes are levied. By referring to Section 116 of
the Act, submission has been made that in case of any doubt or dispute arising as to which
Corporation Authority any particular function belongs, reference can be made to the State
Government whose decision shall be final and, in the present case also, Municipal Commissioner
had sought opinion from the State Government, which was furnished. Specific reference has been
made to communication dated 06.03.2025 whereby the State Government had required the
Commissioner to proceed at his own level as per Section 174 and Rules 4-A and 4-B. In sum and
substance, the contention is that determination made by the Municipal Commissioner in furtherance
of the guidelines and directions issued and request made by the State Government, is strictly in
accordance with the provisions of the Act requiring no interference by this Court.

DISCUSSION

44. Since applicability and interpretation of various provisions of the Act and Rules is
involved in this matter and 'levy/determination of property taxes' and 'annual value' of a
property, are germane to the controversy involved, it would be appropriate to refer to certain
relevant provisions, which read as under:-

"172. Taxes to be imposed under this Act.- (1) For the purposes of this Act and subject
to the provisions thereof and of Article 285 of the Constitution of India the Corporation shall
impose the following taxes, namely -

(a) property taxes,

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