1. This is a petition under Article 227 of the Constitution and it arises under the following circumstances.
2. The applicant in this case is the Borough Municipality of Karad. The Borough Municipality appears to have made certain encroachments upon a street land. In consequence of these encroachments, the Prant Officer, Satara Division, made two orders. By his first order dated January 1, 1953, he levied non-agricultural assessment in respect of 460 encroachments for a period between 1923 and 1951. By his second order dated March 8, 1954, he directed the recovery of non-agricultural assessment in respect of 965 encroachments from the year 1952-53. It seems that these 965 encroachments included 460 encroachments to which the first order relates.
3. The applicant-municipality then preferred an appeal before the Collector of Satara, who modified the Prant Officer's first order, holding that non-agricultural assessment could not be levied restrospectively but it could be recovered only from 1952-53. With regard to the second order, the Collector modified that order, declaring that non-agricultural assessment should be recovered only from the year 1952-53'. The order made by the Collector was challenged before the Bombay Revenue Tribunal and a Bench of that Tribunal affirmed the order made by the Collector and dismissed the. application. It is this last order which has been called in question upon thispetition.
4. Mr. Shanbhag, appearing for the municipality, contends that the view taken by the BombayRevenue Tribunal cannot be supported. In this connection he relies upon Section 63 of the Bombay Borough Municipal Act, 1925, and also relies upon a decision of this Court reported in Ahmedabad Municipality v. Government of Bombay (1941) 44 Bom. L.R. 354. It will, be convenient, first, to refer to Section 63. Section 63(2) of the Act provides:
All property of the nature specified in the clauses to this section, not being specially reserved by the State Government, shall be vested in and belong to the municipality, and shall, together with all other property of what nature or kind soever, which may become vested in the municipality, be under its direction, management and control, and shall be held and applied by it as trustee, subject to the provisions and for the purposes of thisAct:-...
The contention, taken by Mr. Shanbhag is that this section shows that the municipality would become the owner of the property and this is suggested by the expression 'belong to the municipality'. Now, the expression 'belong to the municipality' would undoubtedly imply ownership, and the construction suggested by Mr. Shanbhag would receive some support from the case reported in Ahmedabad Municipality v. Government of Bombay; but, as I will presently show, on facts, Ahmedabad Municipulity's case can be distinguished. What happened in the case was that a certain land was situate within the limits of the Municipality ofAhmedabad. A well stood on the land and the site had been vested in the municipality, which was the plaintiff: in that case, as property of a public character. In the city survey of 1921 the laud was entered in the plaintiff's name, it would appear that the well was filled up subsequently and the site became an open land. The City Survey Officer' held a formal inquiry und decided in 1935 that it was Government land, the ground for the decision being that the public well had been filled up and the public and non-profitable use of it having ceased to exist, the site reverted to Government. The plaintiff appealed to the Collector, who dismissed it, and then to the Commissioner, who rejected the plaintiff's appeal. Then the plaintiff gave a notice of suit under Section 80 of the Code of Civil Procedure and filed the suit which came up in Second Appeal before this Court. In the suit filed by the plaintiff he claimed a declaration that the site in question had vested in the municipality and had belonged to it. The defendant to the suit, on the other hand, contended that as the. well was filled up, the purpose for which the land had vested in the plaintiff ceased to exist and, therefore, the site reverted to the defendant. Now, the view taken by this Court is, I think, correctly expressed in the head-note, a part of which is in the following terms:
When property of the nature described in Section 63 of the Bombay Municipal Boroughs Act, 1925, and vested by the Provincial Government in a borough municipality, ceases to be used for the purpose which led to its vesting, e.g. when a public well on its being filled up ceases to be used as a public well, the land does not on the cesser of such user revert to the Provincial Government, but remains the property of the borough municipality.
In dealing with the question, Sir John Beaumont said at p. 357 of the report:.But under Section 63 of the Bombay Municipal Boroughs Act there is no question of divesting private property; all the property dealt with is property of a public nature.. The only conflict which arises under the section is between the claims of the limited public of the municipality concerned and the claims of the wider public of the province. There is nothing inherently unjust or unreasonable in the Legislature having provided that property once vested in the municipality shall for all times be held for the benefit of the local public. It is noticeable too that the expression in Section 63 is 'shall be vested in and belong to, and the word 'belong' denotes ownership.
Therefore, the question, which arises for decision in this case, was not deeided in Ahmedabad Municipality'scase. Mr. Shanbhag is, therefore, not right in relying upon. AhmedabadMunicipality's case for the contention that the Government would have no power to levy non-agricultural assessment in respect of these encroachments.
5. But the question must be examined by a reference to the Land Revenue Code. It would he necessary to notice some of the sections. Section 37 shows that all lands which are not the property of an individual belong to Government. Section 45 makes all land liable to pay land revenue and it provides:
All land, whether applied to agricultural or other purposes, and wherever situate, is liable to the payment of land revenue to the Government according to the rules hereinafter enacted except such as may be wholly exempted under the provisions of any special contract with the Government or any law for the time being in force.
It is clear that every piece of land is, therefore, liable to payment of land revenue unless an exemption can be claimed, either upon the footing of a special contract or on the footing of any law for the time being in force. Section 48 is important, and it provides by Sub-section (3) that where land held free of assessment on condition of being used for any purpose is used at any time for any oilier purpose, it shall be liable to assessment. Section 52 shows as to by whom the assessment is to be fixed. Then a reference may be made to Section 128 and that section shows the circumstances under which the existing exemption may continue. Finally, Section 131 refers to survey of lands in certain sites and provides as to how a survey has to be conducted. The Bombay Revenue Tribunal relied upon Section 45 and Section 52 of the Bombay Land Revenue Code and, relying upon these sections, the Bombay Revenue Tribunal took the view that non-agricultural assessment could be imposed in this case. The Bombay Revenue Tribunal referred also 'to the decision in Ahmedabad Municipality's case and referring to the facts of that case, proceeded to distinguish the decision in that case.
6. But, unfortunately for the applicant, the applicant has not only the relevant provisions of law against him but the contention appears to be opposed to a decision of this Court reported in Province of Bombay v. Ahmedabad Municipality : AIR1954Bom1 , F.B.. To refer to Section 45 once again, it is clear that all land is liable to the payment of land revenue unless a special contract is shown to exist or there is any law which is in force to depart from the rule laid down in Section 45. In this case Mr. Shanbhag has been unable to show any special contract with Government and is equally unable to show that any law which is for the time being in force is in his favour. Now, in this case the position was that the land was vested in the municipality for a public purpose. But the purpose has been changed because the municipality has made certain encroachments upon the public street; and in this connection Section 48(5) becomes relevant and the effect of that provision is that once the purpose is shown to have changed, the land, which was in the first instance free of assessment, becomes liable to assessment. This was the view which was taken in the Province of Bombay v. Ahmedabad Municipality referred to above. It will be necessary to refer to a few facts relevant for the purpose of this decision. The Ahmedabad Municipality filed a suit challenging a decision of the Collector of Ahmedabad who had levied non-agricultural assessment on 92 square yards of public street land vested in the municipality and which the municipality had converted into a fish market. One of the issues raised in the case was whether the non-agricultural assessment could be levied. The Court of first instance decided the issue in favour of the municipality, holding that the State Government could not levy assessment upon lands which had vested in the municipality. The municipality then filed another suit against the Collector of Ahmedabad, also challenging an order of the Collector levying non-agricultural assessment on another 601/2 square yards of public street land which had also vested in the municipality on which the municipality had constructed some meat shops. Two questions, therefore, arose for decision; (1) one of the two questions was whether the decision in the earlier suit operated as res judicata and (2) whether the State Government had power to levy non-agricultural assessment. The trial Judge dismissed the suit, but, upon appeal, the learned Assistant Judge allowed the appeal and set aside the decree of the trial Court. When the matter came up in Second Appeal, Mr. Justice Bavdekar and Mr. Justice Vyas, who heard the appeal, differed on the question of law, which was whether the decision in the first suit operated as res judicata, but both the learned Judges took the view that with regard to the levy of non-agricultural assessment Government had power to do so. As the two learned Judges differed on the question of law, the matter was referred to a Full Bench and the Full Bench took the view that the decision in the first suit did not operate as res judicata. And on the other question Mr. Justice Vyas agreed with the conclusion of Mr. Justice Bavdekar; and the Full Bench, with regard to this question, said as follows (p. 717):.As pointed out, on merits Mr. Justice Bavdekar and Mr. Justice Vyas have held that in law the State can levy assessment on land which has vested in the Municipality.
The Full Bench, therefore, accepted the conclusion come to by the two learned Judges and then allowed the appeal, set aside the decree of the appellate Court and restored the decree of the trial Court. So that the case reported in the Province of Bombay v. Ahmedabad Municipality, as rightly pointed out by Mr. V.S. Desai appearing for the opponent, applies to the facts of this case and would be a binding authority upon this Court.
7. Therefore, the result of the above discussion is that both on the relevant provisions of the Bombay Land Revenue Code and on the authority of the case reported in Province of Bombay v. Ahmedabad Municipality, the Bombay Revenue Tribunal came to a correct conclusion when the Tribunal held that the Collector was empowered to impose non-agricultural assessment on the land under encroachments in question. Consequently, the application must fail and the rule will be discharged with costs.