# BASAPPA RUDRAPPA BETGERI & ORS v. BUBLI DHARWAR MUNICIPAL CORPORATION

- **Citation:** [1971] Supp. 1 S.C.R. 535
- **Court:** Supreme Court of India
- **Decided:** 1971-04-27
- **Case number:** Civil Appeal No. 2206 of 1966
- **Bench:** J. M. Shblat, I. D. Dua, V. Bhar.Gava
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/basappa-rudrappa-betgeri-ors-v-bubli-dharwar-municipal-corporation-5274
- **Pages:** 5

## Headnote

Bombay Municipal Boroughs A.ct, 1925, ss. 73, 85-Levy of house tax
by municipality on lessees of buildings owned by municipality-Validity
of levy.
The respondent Corporation was originally constituted as a Borough
under the Bombay Municipal Boroughs Act, 1925 having been converted
into a Corporation in 1962. The Borough owned several buildings in the
area of its jurisdiction and some of these were given on lease to the ap--
pellants in 1953. The leases were renewed in 1955. Neither in the original
leases nor in the fresh leases was there any mention of the liability of tho
tenants to pay the house· tax.
Subsequent to the execution of the fresh
leases hills were received from the responden~ by the appellants calling
upon them to pay the house tax imposed in respect of the buildings belonging to the respondent which were on lease with the appellants. The appellants filed a suit challenging the legality of the imposition of this house tax.
The main ground taken was that the Municipality could not impose a house
tax on buildings owned by itself. The trial court held that the respondent
was not competent to levy from the tenants any sum in excess of the agreed
rents and that in the circumstances of this case notice under s. 206-A of
the Act was not necessary. The Additional District Judge in appeal agreed
that the levy was not valid but held the suit not to be maintainable for·
want of a notice under s. 206-A. The High Court in second appeal held
that the levy was valid and that a notice under s. 206·A was necessary. In
appeal by special leave to this Court,
HELD: There is nothing in the scheme of the Act to indicate that
buildings belonging to the municipality itself cannot be subjected to tho
house-tax which can be imposed under s. 73 of the Act. The language
of s. 85 specifically envisages imposition of such a tax on buildings belonging to tho municipality. It clearly lays down that such a tax shall be
loviable primarily from the actual occupier of tho property oli -which the
tax is assessed, even if he holds it on a lease from tho municipality. The
fixation of such respon&ibility primarily on the occupier holding a building
on lease from the municipality could only be laid down on the basis that
tho buildings owned by tho municipality can be subjected to the tax. Once
the tax is imposed on such a buildins it would be payable by the occupier
if he holds it as a lessee of tho municipality, There is nothing anomalous
in such taxation because tho tax is not levied by the municipality on itself
but OL the lessee.
[On tho above view the court did not find it necessary to decide whetbtr
before tho filing of tho suit by the appellants a notice undeJ ._ 206-A of
the Act was necessary.]
Crvn. APPBLLATE JUKJSDICTION : Civil Appeal No. 2206 of
1966 ..
Appea.I by ~_leave frOIJI !he iudPlent and order dated
February 23, 1966 of lhe Mysore High Court in Second Appeal
No. 888 of 1961.
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536
SUPl\EME COURT REPOJ.TS
(197!) SUPP. S.C.R.
A
S. V. Gupte, Naunit Lal S. S. Khanduja and Swar1111jit Sodhi
for the appellants.
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G
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K. R. Chaudhuri, for the respondent

## Text

BASAPPA RUDRAPPA BETGERI & ORS.
v.
BUBLI DHARWAR MUNICIPAL CORPORATION
April 27, 1971
[J. M. SHBLAT, I. D. DUA AND V. BHAR.GAVA, JJ.]
Bombay Municipal Boroughs A.ct, 1925, ss. 73, 85-Levy of house tax
by municipality on lessees of buildings owned by municipality-Validity
of levy.
The respondent Corporation was originally constituted as a Borough
under the Bombay Municipal Boroughs Act, 1925 having been converted
into a Corporation in 1962. The Borough owned several buildings in the
area of its jurisdiction and some of these were given on lease to the ap--
pellants in 1953. The leases were renewed in 1955. Neither in the original
leases nor in the fresh leases was there any mention of the liability of tho
tenants to pay the house· tax.
Subsequent to the execution of the fresh
leases hills were received from the responden~ by the appellants calling
upon them to pay the house tax imposed in respect of the buildings belonging to the respondent which were on lease with the appellants. The appellants filed a suit challenging the legality of the imposition of this house tax.
The main ground taken was that the Municipality could not impose a house
tax on buildings owned by itself. The trial court held that the respondent
was not competent to levy from the tenants any sum in excess of the agreed
rents and that in the circumstances of this case notice under s. 206-A of
the Act was not necessary. The Additional District Judge in appeal agreed
that the levy was not valid but held the suit not to be maintainable for·
want of a notice under s. 206-A. The High Court in second appeal held
that the levy was valid and that a notice under s. 206·A was necessary. In
appeal by special leave to this Court,
HELD: There is nothing in the scheme of the Act to indicate that
buildings belonging to the municipality itself cannot be subjected to tho
house-tax which can be imposed under s. 73 of the Act. The language
of s. 85 specifically envisages imposition of such a tax on buildings belonging to tho municipality. It clearly lays down that such a tax shall be
loviable primarily from the actual occupier of tho property oli -which the
tax is assessed, even if he holds it on a lease from tho municipality. The
fixation of such respon&ibility primarily on the occupier holding a building
on lease from the municipality could only be laid down on the basis that
tho buildings owned by tho municipality can be subjected to the tax. Once
the tax is imposed on such a buildins it would be payable by the occupier
if he holds it as a lessee of tho municipality, There is nothing anomalous
in such taxation because tho tax is not levied by the municipality on itself
but OL the lessee.
[On tho above view the court did not find it necessary to decide whetbtr
before tho filing of tho suit by the appellants a notice undeJ ._ 206-A of
the Act was necessary.]
Crvn. APPBLLATE JUKJSDICTION : Civil Appeal No. 2206 of
1966 ..
Appea.I by ~_leave frOIJI !he iudPlent and order dated
February 23, 1966 of lhe Mysore High Court in Second Appeal
No. 888 of 1961.
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536
SUPl\EME COURT REPOJ.TS
(197!) SUPP. S.C.R.
A
S. V. Gupte, Naunit Lal S. S. Khanduja and Swar1111jit Sodhi
for the appellants.
B
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G
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K. R. Chaudhuri, for the respondent
The Judgment of the Court was delivered by
Bhargan, J.-This appeal by special leave arises out of a
suit challenging the validity of imposition of house-tax and notices
issued for realisation of that tax from the appellants. The respondent, the Hubli Dharwar Municipal Corpor&tion. was originally
constituted as a Borough under the Bombay Municipal Boroughs
Act, 1925 (hereinafter referred to as "the Act"). At the relevant
time, when the disputes leading to the suit arose, it was still a
Borough, but it became a Corporation subsequently in the year
1962. The Borough owned several buildings in Dharwar. Some
of these buildings were given on leases, to the appellants. These
leases were executed in favour of the appellants by the Borough
some time in March and April, 1953. Thereafter, by a General
Committee Resolution No. 36 dated 29th June, 1953, the Borough
decided to recover house-tax and other municipal taxes from the
private individuals who were telllllnts of the municipal buildings
leased out to them. In pursuance of this Resolution, a notice was
issued by the President of the Borough that all the citizens in occupation of the buildings owned by the Municipality must pay
the taxes assessed on them in respect of the premises under their
occupation.
On 9th September, 1953, the appel!a.nts preferred
joint objections against the levy of the house-tax and its realisa ..
tion from them.
On 9th September, 1954, the Government of
Bombay sanctioned the amendment to the then existing Housetax Rules framed under the Act in respect of this Borough, and
the General Committee p315sed a Resolution on the 19th February.
1955 sanctioning the levy of taxes on Municipal owned buildings,
adopting the sanctioned taxes, and bringing them into force with
effect from !st April, 1955 by giving necessary public notice as
required by law. Notice under section 77 was published on 25th
February, 1955 and then the taxes came into forct on !st April,
1955. Thereafter, fresh lease-deeds were executed by the respondent in favour of the appellants on 11th May, 1955. It may be
mentioned that, neither in the original leases of 1953, nor in the
fresh leases of 1955, was there &ny mention about liability of the
tenants to pay the house-tax. Subsequent to the execution of these
fresh leases, bills were received from the respondent by the appellants calling upon them to pay the house-tax imposed in respect
of the buildings belonging to the respondent which were on lease
with the appellants. The appellants, thereafter, filed the suit, out
of which the present appeal has arisen, challenging the legality of
the imposition of the tax. The main ground taken was that the
B. R. BBTOBRI v. KUNIC. CORP. (Bluzrgava, J.)
Municipality could not impose 81 house-tax on buildings owned by
itself, so that the imposition of this house-tax was invalid in law.
The suit was resisted on the plea that it was a valid taxation. A
further defence was taken that the suit waa bad for failure on the
part of the appellants to give notice to the respondent under section 206-A of the Act. "The trial Court decreed the suit, holding
that the respondent was not legally competent to levy from the
tenants, any sum in excess of the agreed rents, and the bills issued for recovery of excess were not valid and that, in the circumillbnces of this case, notice under s. 206-A of the Act was not
necessary. On appeal, the Ilnd Additional District Judge agreed
with the trial Court that the levy of the tax was not justified,
but held that the suit without 81 proper notice under section 206;A
of the Act was not maintainable. He, therefore, allowed the appeal and dismissed the suit with costs.
On second appeal, the
High Court of Mxsore upheld the dismissal of the suit, but on
both the grounds, viz., that the tax was validly levied, and that
the suit wa~ not maintainable for want of proper notice under
section 206-A of the Act. It is against this decision that the appellants have come up to this Court. It may be mentioned that
the appellants sued the Borough in a representative capacity as
representing all the tenants of buildings belonging to the Borough.
Learned counsel for the appellants took us through the various
provisions of the Act and relied on the scheme of the Act to urge
that a Municipality could not tax its own buildings. The power
to impose a tax on buildings is contained in section 73 of the Act,
the relevant portion of which is as follows :-
"73. (I) Subject to any genera.I or special orders
which the State Government may make in this behalf and
to the provisions of sections 75 and 76 a. municipality may
impose f<!r the purposes of this Act any of the following
tax~. namely:-
(I) a rate on building or lands or both situate within the municipal borough;"
A proviso to this provision, which is relevant, may also be quoted :
"Provided further that :
(a) no tax imposed as aforesaid, other than a special
miinitary cess, a drainage tax or a water-rate, shall, without-the express consent of the Government, be leviable
in respect of any building or part of any building or of
any vehicle, animal or other property, belonging to Government and used solely for public purposes and not used
or intended to be used for porposes of profit; and no toll
shall be Ieviable in respect of any animal or vehicle
537
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538
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SIJP&EMll .COU&T l\IU'OB.l'S
[1971] SUPP. s.c.&.
•
used for the passage of 1-oop~ or the ~cmve~ of Gov·
ernment stores or of any other Go~~
property, oc
for the passage of military or poli.c~ftkers on . duty or
the passage or conve~ of any po;rSOJ! or property
in their custody;
·
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..
Section 74 t!ien provides for p11~nt of an .ad hoc sum ascer·
tailned in the manner provided hi that section by the Government
or district local board in lieu of a rate on buildings vesting in
the Government or in the distri~t local boards which are exempt·
ed under clause (a) of the proviso quoted above. Section 75 then
lays down the procedure for imposition of the tax 11nd s. 75(c)
gi~es the right of filing objections to the inhabitants of the borough. It ma.y be noted that the right of filing objections is not
confined only to owners of buildings, but is granted to inhabitants
of the borough which will not excjude the Government or the
district local board in respect of their buildings which may not
satisfy the requirements of the proviso to section 73 inasmuch as
they may not be actually used for public purposes and, hence.
may be liable to be taxed.
Section 78 makes provision for preparation of an assessment list and requires that that list should
contain the names of the owner as well as occupier, if known.
Section 79 deals with cases where the person primaaily liable for
payment of this tax cannot be ascertained, and makes it sufficient
to designate him in the assessment book/as "the holder" of such
premises without further description. Section 80 lays down the
manner in which the completed assessment list is fo be published
a.nd gives a right to every person claiming to be either the owner
or occupier of property included in the list, and 11ny :Lgent of
such tierson, to inspect the list and to lll'ake exttaets tfierefrom
without charge. Finally, attention was drawn to ~he provisions of
section 85, which lays down who is to be primarily responsible for
payment of the tax, in the following language :-
"85. A tax imposed in the form of a rate on buildings or land or bod!. shall be levi!ble primarily from the
actual occupier of the property upon which the tax ~ assessed if he is the owner of the property; or bolds it on
a building, or other lease from ~
.Govjl!lllDellt ot from
the municipa.lity. or on a building lease from any person.
Othttwise the tax shaD be primtirily Jeviabte as follows.
namely:-
(a) if the property Is tet from t~ lessor;
(b) if the ptDperty Is subla, from the superior lessor,
(c) if th\' pro.POf!Y i$. l!llkt. fmm the ~
In whom
the right to let 11).e same vi:sta.'"
B. R. BBTGl!RI v. MUNIC. CORP. (Bhargava, J.)
We are Unab\e \<> aaree with learned. counsel for the appellants
· A
that this scheme of the Act contams any indication that buildings
belonging to the municipality itself cannot be subjected to the
house-tax which can be imposed under section 73 of the Act. In
fact, the language of section 85 specifically envisages imposition
of such a tax on buildings belonging to the municipality. It
clearly lays down tha.t such a tax shall be leviable primarily from
the actual occupier of the property on which the tax is assessed,
even if he holds it on. a lease from the municipality. The fixation
of such responsibility primarily on the occupier holding a building
on lease from the municipality could only be laid down on the
ba~is that the buildings owned by the municipality can be subjected
to the tax. Once the tax is imposed on such a building, it would
be p:iyable by the cscupier if he holds it as a lessee of the municipality. The same principle applies in the case of buildings held
on a lease from the Government. It may be noted that all Government buildings are not exempted from the tax. Only those
buildings are exempted which are used solely for public purposes
and are not used or intended to be used for purposes of profit.
Learned counsel urged that it is anomalous that 81 municipality
should be permitted to impose tax on buildings owned by itself.
But this argument loses sight of the fact that the tax is primarily
payable by the occupier and not by the owner. The purpose of
imposition of tax by 81 municipality on its own buildings is to
ensure that it is paid by the lessees of those buildings. Of course,
if the building is not on lease, the. imposition of the tax would
•erve no purpose at all. That, however, wilI not make the imposition of tax _by the municipality on its own buildings invalid
which imposition will be really effective whenever that building
is given out on lease to any other person. In these circumstances,
we fully agree with the High Court that the tax was validly imposed and the suit challenging its realisation from the appellants had
tq fail.
.
In view of our decision on the validity of the ~. the question whether a notice under section 206-A of the Act wlis necessary or not becomes immaterial. The appeal fails and is dismissed
with costs.
G.C.
Appeal dismissed.
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