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Mancherji Pallonji Contractor Vs. Dinbai Nusserwanji Goawalla - Court Judgment

LegalCrystal Citation
SubjectMunicipal Tax
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 984 of 1940
Judge
Reported inAIR1941Bom260; (1941)43BOMLR543
AppellantMancherji Pallonji Contractor
RespondentDinbai Nusserwanji Goawalla
Excerpt:
lease--construction--' rates taxes or dues of whatsoever kind', meaning of--whether urban immoveable property tax comes within these words--' dues,' meaning of.;the terms of a clause in a lease were - 'that the lessees shall pay the following municipal taxes, viz., general tax, halalkhore tax and license fees, the water tax by meter . . . . and riot taxes and all other existing and future rates taxes or dues of whatsoever king or nature for the time being payable either by the landlord or tenant in respect of the demised premises or any part thereof and the lessees shall pay to the lessors the amount of such taxes or dues when demanded.' on a question having arisen whether the lessees were bound to pay to the lessor the urban immoveable property tax imposed subsequent to the date of the..........drinking and washing purposes of the cattle and riot taxes and all other existing and future rates taxes or dues; of whatsoever1 kind or nature for the time being payable either by the landlord or tenant in respect of the demised premises or any part thereof and the lessees shall pay to the lessors the amount of such taxes or dues when demanded.6. the question arising for determination is whether the urban immoveable property tax falls within that clause.7. the date of the lease is january 27, 1938. the urban immoveable property tax first came into operation in bombay on march 30, 1939, by reason of part vi of bombay act iv of 1939 which amended the bombay finance art of 1932. section 22 of the amending act of 1939 provides as follows:--there shall, subject to the provisions of section.....
Judgment:

Blackwell, J.

1. The plaintiffs bring this suit to recover rents in respect of the properties covered by a lease, exhibit A, which is admitted, and in respect of certain other properties let to the defendants for the months of March and April, 1940, amounting to Rs. 3,400 and also to recover a surra of Rs. 3,357-1-0 alleged to be payable by the defendants to the plaintiffs in respect of certain municipal and other taxes in accordance with the provisions of the lease.

2. In paragraph 3 of the written statement of defendant No. 2, who alone appears to defend the suit, an agreement alleged to have been come to between the plaintiffs and the original defendant No. 1 and defendant No. 2 on March 12, 1940, at the office of the plaintiffs' attorneys is set out, under which it is alleged that the time for payment of the amounts claimed in this suit was postponed, and that this suit is premature.

3. Defendant No. 2 also alleges in paragraph 1 of his written statement that on a true construction of Clause (9) of the lease the defendants are only bound to pay the municipal taxes mentioned in the clause, and are under no obligation to pay the property tax, which is part of the amount claimed, and which defendant No, 2 submits is a Government tax and not a municipal tax, and is not covered by Clause (9) of the lease.

4. Defendant No. 2 raised three issues which are as follows:--

(1) Whether the defendants are bound to pay to the plaintiffs the Urban Immovable Property Tax under Clause (9) of the lease?

(2) Whether the plaintiffs agreed to the arrangement set out in paragraph 3 of the written statement?

(3) What sum, if any, is the plaintiff entitled to recover?

5. After defendant No. 2 had given evidence for a short time, Mr. Khergamvala abandoned the second issue and relied solely upon issue 1. This issue involves a question of construction of Clause (9) of the lease. That clause is set out in paragraph 3 of the plaint and is in the following terms:--

9. That the lessees shall pay the following Municipal taxes, viz., general tax, halalkhore tax and license Fees, the water tax by meter in respect of the water that may be required for drinking and washing purposes of the cattle and riot taxes and all other existing and future rates taxes or dues; of whatsoever1 kind or nature for the time being payable either by the landlord or tenant in respect of the demised premises or any part thereof and the lessees shall pay to the lessors the amount of such taxes or dues when demanded.

6. The question arising for determination is whether the Urban Immoveable Property Tax falls within that clause.

7. The date of the lease is January 27, 1938. The Urban Immoveable Property Tax first came into operation in Bombay on March 30, 1939, by reason of Part VI of Bombay Act IV of 1939 which amended the Bombay Finance Art of 1932. Section 22 of the Amending Act of 1939 provides as follows:--

There shall, subject to the provisions of section 23, be levied and paid to the Provincial Government a tax on buildings and lands, hereinafter called the ' Urban Immoveable Property Tax' at ten per cent, of the annual letting value of such buildings or lands.

Section 24(1), Sub-section (a), provides that this tax shall be collected in the areas within the limits of a Municipality to which this part extends under Section 20 by the Municipality concerned notwithstanding any law under which such Municipality is constituted. Bombay Act I of 1040, Section 6, introduced after Section 24A of Act XVII of 1939, which provides for a penalty in default of payment, a new Section 24AA which enacts that the collection of the tax under Section 24 and the recovery of the penalty under Section 24A on behalf of any Municipality shall be made by the appropriate municipal authority appointed to collect the property tax on behalf of such Municipality under the law under which such Municipality is constituted.

8. Mr. Khergamvala for defendant No. 2 argued that the only taxes payable by the lessees under Clause (9) of the lease were municipal taxes. He submitted that the Urban Immoveable Property Tax was not a municipal tax but a Government tax, and that although it was collected through the machinery of the Municipality it could not be regarded as a municipal tax, and did not fall within Clause (9) of the lease.

9. In my opinion on the true construction of Clause (9) of the lease the liability of the lessees is not confined to municipal taxes in the sense contended for by Mr. Khergamvala, viz., taxes the benefit of which is had by the Municipality. Mr. Khergamvala argued that the words in the clause 'all other existing and future rates taxes or dues of whatsoever kind or nature for the time being payable either by the landlord or tenant in respect of the demised premises 'must be regarded as ejusdem generis with municipal taxes with which that clause begins. I cannot accept this argument. After enumerating a number of municipal taxesi the clause goes on to refer to riot tax. The riot tax is a police tax. Section 45 of the Bombay City Police Act, 1902, deals with the provision of compensation recoverable for injury or damage caused by an unlawful assembly and requires the Municipal Commissioner to recover the amount of compensation fixed by the Chief Presidency Magistrate by an addition to the general tax. Mr. Khergamvala admitted that the Municipality did not have the benefit of the amount so recovered, and that it had to be paid into the Court of the) Chief Presidency Magistrate for distribution by him among the persons entitled. It is plain, therefore, that Clause (9) cannot be confined to municipal taxes in the sense contended for by Mr. Khergamvala, viz., taxes the benefit of which is retained by the Municipality. Consequently, I have to construe the words 'all other existing and future rates taxes or dues' as following upon the words 'riot taxes,' which I hold are not municipal taxes in the sense for which Mr. Khergamvala'contends. Moreover, a further difficulty in the way of Mr. Khergamvala's argument, in my opinion, consists in the use of the words 'or dues'. Mr. Khergamvala submitted that the word 'dues' must be restricted to municipal dues. I do not agree with him. Those words follow upon the words 'riot taxes,' which I hold are not municipal taxes. The word 'dues' has a, wider import than the word 'rates' or 'taxes'. In my opinion the intention of Clause (9) was that the lessors should receive a monthly rent of Rs. 1,501 clear of all municipal taxes, riot taxes, and all other existing and future rates taxes or dues of whatsoever kind, and these later words, following, as they do, the words 'riot taxes' cannot be restricted as meaning municipal taxes in the sense for which Mr. Khergamvala contends. It is in my opinion clear that the Urban Immoveable Property Tax is both a tax and a due in respect of the demised premises. I think that on the true construction of Clause (9) the lessees: are bound to pay those taxes.

10. Accordingly I answer the first issue in the affirmative.

11. The first issue having been thus answered the plaintiffs; proceeded to prove their case strictly against defendants Nos. IA, 1B and 1C, who did not appear. After proving the claim the witness Kesardas Kamalsey stated that since the filing of the suit the plaintiffs had been paid a sum of Rs. 3,500 by all the defendants in the suit. In addition to this defendant No. 2 had paid into Court a, sum of Rs. 1,204-1-0 with his written statement and that money has been withdrawn by the plaintiffs in part satisfaction of their claim. The witness accordingly said that the amount now due by all the defendants to the plaintiffs is Rs. 2,053. The plaintiffs' counsel informs me that: the plaintiffs are willing to give up their claim for interest and will be content with interest on the decretal amount. Counsel for defendant No. 2 agrees that the figure of Rs. 2,053 is the correct amount.

12. Accordingly I pass a decree in favour of the plaintiffs against all the defendants for Rs. 2,053 with costs and interest on judgment at six per cent. The decree as against defendants Nos. 1A, 1B and 1C will be restricted to the extent of the assets of the original defendant No. 1 come to their hands.


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