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High Court Of Delhi
J.R.SOOD - Appellant
Versus
MUNICIPAL CORPORATION OF DELHI - Respondent
Decided On : 08/25/1998
PROPERTY TAX - Ratable Value - Inclusion of Cost of Electric Fittings, Furniture, Fixtures and Air-Conditioning in the Cost of Building - Maintainability of Suit - DMC Act, 1957 - Sections 2(3), 2(24), 116(3) - Specific Relief Act, 1963 - Section 41(h) - Civil Procedure Code, 1908 - Order 7, Rule 11(d).
Fact of the Case:
The plaintiff, a cinema owner, filed a suit for injunction to restrain the defendant, the Municipal Corporation of Delhi (MCD), from recovering property tax based on an increased ratable value that included the cost of electric fittings, furniture, fixtures, and air-conditioning. The plaintiff argued that these items should not be included in the ratable value, and that the suit was maintainable despite the availability of an appeal under the DMC Act.
Finding of the Court:
The court held that the cost of electric fittings, furniture, fixtures, and air-conditioning could be included in the ratable value for the purpose of property tax assessment, as they were permanently attached to the building. However, the court also held that the suit was not maintainable because an equally efficacious remedy was available to the plaintiff by way of an appeal under the DMC Act.
Issues: 1. Whether the cost of electric fittings, furniture, fixtures, and air-conditioning could be included in the ratable value for the purpose of property tax assessment? 2. Whether the suit was maintainable despite the availability of an appeal under the DMC Act?
Ratio Decidendi: 1. The court interpreted Sections 2(3), 2(24), and 116(3) of the DMC Act to hold that anything attached to earth or permanently fastened to anything attached to earth, including electric fittings, furniture, fixtures, and air-conditioning, would be included in the cost of land and building for the purpose of determining the ratable value. 2. The court interpreted Section 41(h) of the Specific Relief Act and Order 7, Rule 11(d) of the Civil Procedure Code to hold that a suit for injunction was not maintainable where an equally efficacious remedy was available by way of an appeal under a special statute, such as the DMC Act.
Final Decision: The court rejected the plaintiff's suit for injunction, holding that the cost of electric fittings, furniture, fixtures, and air-conditioning could be included in the ratable value for the purpose of property tax assessment, and that the suit was not maintainable due to the availability of an equally efficacious remedy by way of an appeal under the DMC Act.
( 1 ) I intend to dispose of this suit for injunction filed for restraining the defendant from recovering any amount based on the bill dated 17th July, 1995 and the show cause notice dated 14th December, 1995 bearing No. Tax/ TRC /sau/scn/13328 in respect of EROS Cinema, New Delhi and from recovering any property tax on the ratable value of Rs. 4,89,330. 00 or any other ratable value other than Rs. 50,849. 00 and IA No. 3022/96 filed for ad interim injunction of similar nature.
( 2 ) HAVING heard the learned Counsel for the parties and after going through the records, it appears that the present dispute basically relates to the following points:
(I) Inclusion of cost of electric fittings, furniture and fixtures and airconditioning in the cost of building; and
(II) Maintainability of the suit.
( 3 ) AS regards inclusion of certain items for the purpose of ratable value is concerned, one has to refer to the definition of the words "land and building" and "plant and machinery" as used in Sections 2 (3), 2 (24) and 116 (3) of the DMC Act. They read as under:
"2 (3) "building" means a house, out-house, stable, latrine, urinal, shed, hut, wall (other than a boundary wall) or any other structure, whether of masonry, bricks, wood, mud, metal or other material but does not include any portable shelter 2 (24) "land" includes benefits to arise out of land, things attached to earth or permanently fastened to anything attached to earth and rights created by law over any street. ".
"116. (L ). . . (2 ). . . (3) All plant and machinery contained or situated in or upon any land or 310 building and belonging to any of the classes specified from time to time by public notice by the Commissioner with the approval of the Standing Committee, shall be deemed to form part of such land or building for the purpose of determining the ratable value thereof under Sub-section (1) but save as aforesaid no account shall be taken of the value of any plant or machinery contained or situated in or upon any such land or building. " (Emphasis supplied)
( 4 ) HERE it is required to be seen that what is included in land and building will obviously not fall within the definition of plant and machinery. So, cost of anything attached to earth or permanently fastened to anything attached to earth (including lift) shall automatically be included in the cost of land and building (See Municipal Corporation of Delhi v. M/s. Pragati Builders and N. R. D. C. of India and Am. , AIR 1991 Delhi 212 (DB)}.
( 5 ) HOWEVER, submission of learned Counsel for the plaintiff is that in the light of Hindustan Lever Ltd. v. Municipal Corporation of Greater Bombay and Ors. , (1995) 3 SCC 716, cost of air-conditioning machinery and false ceiling could not be included for the assessment of ratable value. Learned Counsel for the plaintiff refers to Section 154 (2) of the Bombay Municipal Corporation Act (hereinafter called "the BMC Act for short), which reads as under:
"154 (1 ). . . (2) The value of any machinery contained or situated in or upon any building or land shall not be included in the ratable value of such building or land. 6. On the basis of the language of this section and Section 116 (3) of DMC Act, it is submitted that both use the same language, therefore air conditioning plant and machinery could not be included in the cost of building for assessment of ratable value. Before proceeding further, it is desirable to note that there is a difference in Section 154 (2) of the BMC Act and Section 116 (3) of the DMC Act, for in the BMC Act only term machinery has been used while in the DMC Act it is plant and machinery and not only machinery .
( 7 ) HERE it is required to be seen that what is included in land and building will obviously not fall within the definition of plant and machinery. So, cost of anything attached to earth or permanently fastened to anything attached to earth (including lift) shall automatically be included in the cost of land and building {see Mu
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