The main legal point established in the judgment is that the liability of the lessee to pay property tax under the Delhi Municipal Corporation Act arises when the conditions specified in Section 120(2) are satisfied, and the construction of a building on the land commences.

( 1 ) INTERPRETATION of various provisions of the Delhi Municipal Corporation act (hereinafter referred to as the DMC Act) as regards the liability of the lessee to pay property tax is the question involved in this batch of writ petitions.

( 2 ) THE order of reference was made by Hon ble Mr Juustice Mahinder Narain,. vide order dated 16. 12. 1986 differing with the judgment passed in CW 942/80 wherein it was held that even if a lease is not registered, the liability to pay tax would arise.

( 3 ) WITH a view to determine the rival contentions raised by counsel for the parties before us we may notice the fact of the matter from CWP 1336/90. A deed of lease was executed by the President of India and Mohan cooperative Industrial Pvt Ltd as the Lessor and Shashank Steel Industries Pvt Ltd (hereinafter referred to as Shashank Steel) as the sub-lessee, respondent No. 1 herein, in terms whereof 1721. 25 sq yds of industrial land had been given on perpetual sub lease, w. e. f. 8. 2. 1997. For the five years of sub lease the rent was payable @ Re. 1/- per annum whereafter it was enhanced to @ Rs. 402. 30 per annum. In terms of the provisions of the said lease, possession was to be delivered to the assessee prior to 1. 4. 1982 and it had the liability to raise construction within 2 years from the said date. The relevant terms and conditions of the said indenture of lease are as under:

" (5) The sub-Lessee shall, within a period of two years from the Twentieth day of February, one thousand nine hundred Eighty one and the time so specified shall be of the essence of the contract after obtaining sanction to the building plan, with necessary designs, plans and specifications from the proper municipal or other authority at his own expense, erect upon the industrial plot and complete in a substantial and workmanlike manner an industrial building for carrying on the approved manufacturing process or industry with the requisite and proper walls, sewers and drains and other convenience in accordance with the sanctioned building plan and to the satisfaction of such municipal or other authority. 6 (a) The sub-lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any of the industrial plot in any form or manner, benami or otherwise to a person who is not a member of the Lessee.

( 4 ) A plan for construction of building was submitted on 15. 6. 1984. It was sanctioned on 3. 8. 1984. Construction of the structures started soon thereafter. By reason of an order dated 29. 1. 1988 the rateable value (RV) of the plot was determined at Rs. 2400 per annum from 1. 4. 1982 and composite assessment of land and building was fixed from 18. 11. 1986 by order dated 1. 2. 1988 @ of Rs. 299930/- p. a. The dispute is with regard to determination of RV for the period 1. 4. 1982 to 17. 11. 1986. The first respondent does not dispute its liability from 18. 11. 1986.

( 5 ) IT however being aggrieved by and dissatisfied with the said order preferred an appeal before the Additional District Judge Delhi and by reason of the impugned order dated 10. 7. 1989, the said appeal was allowed, inter alia on the ground that no property tax could be levied in terms of sub-section (1) of Section 120 of the DMC Act. The said order was passed inter alia on the premise that the property tax would be leviable only after the plan is sanctioned and that the building in question was to be constructed on leasehold plot, the first respondent will have no liability to pay property tax till construction is started. In support of the said contention reliance has been placed on M. C. D. v. Peerless Finance Co. 1987 Rajdhani law Reporter 144. The said orders are in question in these writ petitions.

( 6 ) MR. Nandrajog, learned counsel appearing on behalf of the petitioner- mcd would submit that the said provision should be read in its entirety and so read as also keeping in mind the legislative history as also the object and purport for which it had