1. This is an appeal by the Municipal Borough of Ahmedabad against a decree of the Assistant Judge in appeal dismissing its suit against the Government The suit was for a declaration that the part of a public street on which a cabin was erected by its lessee of the adjoining land had vested in the plaintiff-Municipality and that the Government had acted illegally in recovering from the Municipality Rs. 128-2-0 being half the amount of rent which the latter had realised from its lessee. It also prayed for its refund.
2. The events which gave rise to this litigation are shortly these :-The Municipality with the previous sanction of the Commissioner granted a lease of a portion of a public street to the Indo-Burma Petroleum Company, Limited, for three years from June 1, 1933, for erecting a petrol pump on that street and a petrol tank below it on condition that the lessee should payRs. 25 per month as well as the assessment of the land to the Government, and Rs. 25 to the Municipality as rent. The payment of half the rent to the Government was presumably for the use of the subsoil. About two years later it came to the notice of the Municipality that a wooden cabin had been unauthorisedly constructed by the lessee company on the adjoining part of the street which was not included in the lease. Later on there was an agreement between the Municipality and the lessee that Rs. 10 per month should be paid by the lessee to the Municipality for the use of this piece of land on which the cabin was put. This user continued till December 19, 1935, when the cabin was removed. Thereafter the company wanted to have the original lease cancelled, and the Municipality wrote a letter to the Commissioner on June 19, 1936, asking for permission to cancel the original lease and also asking for retrospective sanction of the lease of the additional site over which the cabin had been constructed and was used by the lessee from November 1, 1933, till December 19, 1935. No reply to this request for retrospective sanction was given to the Municipality. Instead of that in March 1937, the Deputy Collector of Ahmedabad wrote a letter to the Municipality asking it to pay half of the amount which the Municipality had recovered as rent from the lessee company for the period during which the cabin remained on the land. The Municipality paid the amount under protest and then brought the present suit for a declaration that the land over which the cabin was constructed was public street land and that the action of the Government in recovering half of the rent from the Municipality was illegal, and for a refund of the same.
3. The defence of the Government was that the plaintiff-Municipality had no right to the subsoil of the street land as it was not vested in it and that the erection of, a cabin in the street by the lessee involved the use of the subsoil for which the Municipality was not entitled to recover rent. It was on this ground that the defendant claimed a half share in the rent realised by the Municipality from the lessee company.
4. The material issues on these pleadings were whether the erection of the cabin involved the use of the subsoil and whether the Municipality had proved that it had the right to lease the public street land and realise the rent thereof without paying anything to theGovernment. The learned trial Judge held that no part of the sub-? soil was used in constructing the cabin and that it stood on a part of the public street which had vested in the Municipality under Section 63 of the Bombay Municipal Boroughs Act, 1925. It appears that in the course of arguments the Government relied upon a Government Resolution to the effect that the Commissioners were ordered to make the sharing of fifty per cent of Government in the rental of the public street land let as a condition of grant of the sanction, and the case of the Government was that as the Municipality had realised this rent for use of a part of the public street, it ought to pay to the Government half the rent realised in the same way as it did for the plot covered by the original lease. The learned trial Judge, however, rejected that argument on the ground that although in the case of the lease of the main plot of land there was an express condition in the lease itself, in the case of this land used for the cabin not only was there no lease with any condition, but there was also no agreement between the Municipality and the Government under which the latter was to realise half of the rent already recovered. What the Municipality realised were damages for use and occupation without permission, and there was no statutory obligation on the Municipality to share that amount with the Government. A decree was, therefore, passed in favour of the Municipality for the amount claimed.
5. On appeal, the learned Assistant Judge agreed with the finding of the trial Court that the erection of the wooden cabin on the suit site did not involve the use of any part of the subsoil. But the learned Judge was of the opinion that the use by the lessee company of this extra piece of land for erecting the cabin required the sanction of the Commissioner under Section 48 read with Section 114 of the Bombay Municipal Boroughs Act and that such use without the sanction of the Commissioner was not legal and valid. In the opinion of the learned Judge the effect of this illegal use amounted to a legal surrender by the Municipality of this additional piece of land to the Government, and on that ground the Government was entitled to ask for the whole of the amount of rent realised by the Municipality from the lessee. But on equitable grounds the Government allowed the Municipality to retain one-half of it presumably because the Government and the Municipality shared half and half of the amount paid by the company in respect of the adjacent land. The learned Judge, therefore, held that the Government was not bound to refund the amount to the Municipality. As a result the appeal was allowed and the suit was dismissed.
6. The Municipality has now filed this second appeal against the decree dismissing the suit, and the main contention urged on behalf of the appellant is that even conceding that the sanction of the Commissioner was required for the use of a portion of the public street for the cabin, the Government was not entitled to recover half of the amount of rent realised by the Municipality, because for that land there was no lease granted with any condition to pay half of the rent to the Government, nor was there any separate agreement between the Municipality and the Government to that effect. It is also contended that the view taken by the learned Judge below that the unauthorised use of this piece of land without the sanction of the Commissioner amounted to a legal surrender was wrong in law, and that in spite of such unauthorised user the land would still remain vested in the Municipality. It seems to us that this argument is correct and that the view taken by the learned Judge below is erroneous in law. It is no doubt true that the Municipality asked for retrospective sanction for the use of this additional piece of land on the ground that under Section 48 such use amounted to a lease and required the sanction of the Commissioner, and we will proceed on the basis that it did require such sanction. But it cannot be said that because no such sanction was given, the Government was entitled to recover half the amount recovered by the Municipality for such unauthorised use. It was certainly open to the Commissioner to give retrospective sanction with the condition that half the-amount of the rent realised should be handed over to the Government. In fact such condition had been attached in the case of the first lease. But no such sanction was given for the cabin. The case of the Government in this suit as put in the written-statement is that the Municipality is entitled to recover half of the amount because the unauthorised erection of the wooden cabin involved the use of subsoil. That case has been definitely rejected by both the Courts below. That being so, the defence of the Government is bound to fail. It has not been their case in the lower Courts that even though no part of the subsoil was used for the purpose of the cabin, the Government was entitled to half the rent recovered either under any agreement or under the terms of any lease. The alleged Resolution, which seems to have been relied upon by the Government in the trial Court, is not in evidence, but even if there is such a Resolution, it cannot amount to an agreement between the Municipality and the Government, and the Government would not be entitled to half the rent unless it was proved that it was either a condition of the lease or that there was an agreement between the parties to that effect. In absence of both it is difficult to see how the Government can claim half the amount from the Municipality. Even if it be assumed for the sake of argument that the Municipality had no power to levy the rent from the lessee without the sanction of the Commissioner, the Government cannot realise half the rent recovered merely on that ground. It may be that the lessee would be entitled to recover the rent paid by it to the Municipality on the ground that it was unauthorisedly recovered by the Municipality from it. We are however not concerned with that position and we do not express any opinion on it. But so far as the Government is concerned, it has no right to recover any part of the rent realised by the Municipality for the unauthorised occupation of the public street. The error of the learned Judge was that he regarded this part of the public street as having reverted to the Government because of its unauthorised use. But that is clearly not the legal position. It has been recently held by our Court in Ahmedabad Municipality v. Government ofBombay (1941) 44 Bom. L.R. 354 that when property of the nature described in Section 63 of the Bombay Municipal Boroughs Act ceased to be used for the purpose which led to its vesting, the land did not on the cessor of such user revert to the Government but remained the property of the Borough Municipality. Applying that principle to the present case, even if the land was unauthorisedly used by the lessee, it did not cease to be vested in the Municipality. At no time did it revert to the Government either during its user by the lessee or thereafter. That being so, the Government has no claim on any amount recovered by the Municipality for the occupation of this land. The view taken by the trial Court that there was no agreement between the Government and the plaintiff as regards sharing the rent of the lease and that there was no statutory provision under which the Government can claim a share in this amount seems to us to be correct.
7. The result, therefore, is that the decree of the lower appellate Court is reversed and the decree of the trial Court restored with costs throughout.