S.N. Khatri, J.
1. This is an appeal by the Municipal Corporation of Greater Bombay, against the decree of the learned Bombay City Civil Court Judge (Shri H. Suresh), granting certain declarations and injunctions against the Corporation, I will later have occasion to advert to these reliefs in detail.
2. The facts that are no longer in dispute are theses. Respondent No. 2, defendant No. 2 is owner of plot admeasuring about 54'x96' at Andheri East. In April 1957, plaintiff-respondent No. 1 took it from him on a monthly lease on rent of Rs. 85/- per month. There are several structures on the plot, which undisputedly belong to the plaintiff. Thus the factual position is that the structures belong to the plaintiff, whereas the land beneath them belongs to defendant No. 2. As the land and the structures have been treated as a single unit for the purposes of taxes. I shall refer to the unit as composite unit, to distinguish it from the components.
3. On 22nd January, 1963 the Dy. Assessment Officer and Collector, (Suburbs) of the Corporation issued a communication bearing No. K.A.S./467 to defendant No. 2 as well as the plaintiff accompanied by the bills covering the period from April 1960 to March 1963. The Corporation by this letter called upon both addressees to pay the arrears of taxes in respect of the composite unit, as stated in the bills on pain of initiation of recovery proceedings under sections 207(a), 203 and 206 and other provision of the Bombay Municipal Corporation Act, (herein after for short the Act). On 30th January, 1964, the Solicitors of the Corporation issued two more communication sot the plaintiff as well as defendant No. 2, again calling upon them to pay arrears of property taxes for the cumulative period from October, 1960 to September 1963. Again this letter contained a warning that proceedings as indicated above would be taken in case the demands were not complied with. I have referred to these communications somewhat is detail, because the lower Court has granted reliefs in respect of them.
4. The plaintiff's case in the lower Court was that under section 146 of the Act, it was the defendant No. 2 alone who was primarily liable to pay the property taxes for the composite unit. His case appears to be that he was not at all liable to pay the taxes, even in respect of the structures which admittedly belong to him the three communications admittedly belong to him. According to him, the three communications issued to him were, to use his own terminology, 'invalid, bad in law and in excess of jurisdiction'. He prayed that declaration be granted in his favour that the plaintiff was not liable to pay the property taxes in respect of the plot or the structures standing thereon and that the three communication were invalid and bad in law. A permanent injunction was not also claimed, restraining the Corporation from taking any proceedings under the Act to in force the three notices.
5. The defence of the Corporation in substance was that although the second defendant was primarily liable to pay property taxes in respect of the composite unit, the plaintiff was also liable as occupier under section 202 of the Act. It was also contended that the Corporation had a charge on the entire composite under section 212. Defendant No. 2 also took substantially identical defence. Both prayed for dismissal of the suit.
6. As all the questions involved were of law, the parties did not lead any oral evidence before the learned Judge. Relying on the provision of section 146 of the Act, the learned judge held, and rightly, that it was defendant No. 2 who was primarily liable for the payment of property taxes in respect of the entire composite unit, although he was the owner of the and only. The learned Judge further upheld the plaintiff's contention that he was no liable at all under any circumstances. The reasoning of the latter aspect is not very clear. As I can gather from paragraph 24 of the judgment the learned Judge's view appears to be that the provisions of section 203 apply to only those persons who was primarily liable, and as the plaintiff is admittedly not so primarily liable, his case can in no circumstances attract the consequence enacted in section 203 and other connected sections of the Act. Eventually the learned Judge granted the following reliefs to the plaintiff :
(1) Declaration in favour of the plaintiff that he is not the person primarily liable to pay the property taxes of the Corporation in respect of the structures on the plot of land.
(2) Declaration in favour of the plaintiff that the Corporation are not entitled to make out the bills for the said property taxes in respect of the said plot land or in respect of any structure or building constructed or standing thereon in the name of the plaintiff or to issue notices either under section 202 of the Bombay Municipal City Act or under any other provisions of the said Act upon the plaintiff for the recovery of the taxes.
(3) Injection restraining the Corporation from taking any proceedings under section 203(1) of the Act as against the structures situated on the suit land.
In the end the learned Judge has issued a clarification that the judgment would not effect the rights of defendant No. 2 under section 147 of the Act or under any provisions of the Bombay Rent Act and/or under the consent terms Ex. E, which the parties had arrived at in a previous Small Cause Court Suit. We are concerned with this part of the decree in this appeal.
7. In this appeal, the learned Advocates have again reiterated the position that they had taken in the lower Court. It is not disputed before me that the first declaration granted by learned Judge is no open to any exception. Without deleting on the point. I may refer to the ruling of the Supreme Court reported in 72 Bom.L.R. 112 National and Grindlays Bank v. Municipal Corporation of Greater Bombay, in which section 146 of the Act came for interpretation. The Supreme Court has held that where the land is set and the tenant has built upon that land, there can be a composite assessment of the tax upon the land and the building taken together and that in the case of such a composite unit, the primary liability of assessment of tax is intended to be on the lessor of the land under section 146(2)(a) of the Act section 146(3) provides that if any land is let for any term exceeding one year to tenant and such tenant or any person claiming through him builds upon the land, then only the tenant becomes primarily liable for the composite unit. In our case the plaintiff is admittedly a month to month tenant in respect of the land. It follows that the primary liability for the entire composite structure will be that of the defendant No. 2. and the first declaration granted by the lower Court will have to be updated.
8. The crucial question that is posed in this appeal is whether the plaintiff is not liable for taxes under any circumstances whatsoever, as apparently held by the learned Judge. The plaintiff's learned Advocate Shri Shah, did not present to support the extreme position before me. He, however, submitted that the Corporation could proceed against the plaintiff only after it had exhausted all its remedies against defendant No. 2, who admittedly is the person primarily liable for payment of taxes in respect of the entire composite unit. In my opinion the key to the question lies in section 209(1) of the Act. It runs as follows :
'If the sum of account of any property-tax remains unpaid after a bill for the same has been duly served on the person primarily liable for the payment thereof and the said person be not the occupier for the time being of the premises in respect of which the tax is due, the Commissioner may serve a bill for the amount on the occupier of the said premises, or if there are two or more occupiers thereof, may serve a bill on each of them for such portion of the sum due as bears to the whole amount due to the same ratio which the rent paid occupier bears to the aggregate amount of rent paid by them or all in respect of the said premises.'
The unambiguous language of this provision does not present nay difficulty of interpretation. An occupier will become liable, provided the property taxes remain unpaid after a bill for the same served on the person primarily liable and secondly such person is not the actual occupier for the time benign respect of which the tax is due. If these two conditions are fulfilled, then the actual occupier, which in our case the plaintiff admittedly is, will become liable for satisfaction of the arrears of course, subject to the various provisions enacted in the four sub-sections of section 209. In our case, it is not dispute that defendant No. 2 has been duly served with the bills for recovery of the property taxes. It is also not is dispute that defendant No. 2 has never been in actual occupation of the premises in question. The plaintiff thus becomes liable for the payment of the taxes in terms of section 209 of the Act.
9. Section 203 prescribes the modalities for issuances of distress and attachment warrants by the Commissioner for recovery of arrears from the defaulter. The learned Trial Judge is of the opinion that the defaulter referred to in this section would mean only the person who is primarily liable. This restriction placed by him on the construction of the section is without any reason or basis. A plain reading of this section will show that the procedure prescribed by this section will apply even to a person who is not primarily liable, provided his liability is attracted under law Sub-section (2) of section 209 shows that the recovery by 'the aforesaid provisions'. Obviously, these aforesaid provisions include section 203 also. I do think it necessary to labour the obvious point that the defaulter as referred to in section 203 includes not only a person primarily liable but also occupies who may become liable under section 209.
10. The learned Judge's impression that the concept of primary liability as evolved in section 145 has relevance only for the purpose of recovery of taxes by the Corporation, also does not appear to be entirely correct. The concept becomes relevant in other contexts also to with situation contemplated by sections 209(4), 147, 148 of the Act, where the question of equitable appointment between persons holding different rights arises. The learned judge is clearly in error interpreting section 203 in a restricted sense, so as to make the provision applicable to persons primarily liable only.
11. For all these reasons, I hold that the second declaration granted by the learned trial Judge cannot be sustained in law. The injunction granted by the learned trial Judge against the corporation directly flows from this particular declaration and as such will fall to the ground along with it. I may make it clear here the at the validity of the of the three communication is challenged by the plaintiff solely on the ground that he is not liable for payment of taxes under any circumstances. He does not further rely on any defect of form or language of the communications. It is, therefore, not necessary for me to examine any such aspect.
12. It was urged before me by Shri Walawalkar on behalf of the corporation that the corporation has a right to proceed against the property as well, apart from persons who may attract liability to pay, because they are primarily liable or are occupiers. The right of the Corporation is recognised statutorily be section 212 of the Act, which declares property taxes to be a first charge on the property, subject only to prior right of the State of recover and revenue, if any. Thus it will be open to the corporation to proceed against the property concerned also for recovery of arrears of taxes. This, of course holds good in respect of the property involved in the present suit as well.
13. In the result, the appeal will have to be allowed and is hereby substantially allowed. The order of the lower Court will be substituted by the following :---
A declaration is granted that the plaintiff is not a person primarily liable within the meaning of section 146 of the Bombay Municipal Corporation Act to pay the property taxes of defendant No. 1 in respect of the structures as well as the plot in suit on which they stand. The liability of the plaintiff can however legally arise inter alia under section 209 of the Act and can be enforced by the defendant No. 1. In terms thereof. The clarification issued by the lower Court with regard to the rights of defendant No. 2. Under section 147 of the Act or under the Bombay Rent Act and/or under the consent terms Ex. E, stands and is hereby confirmed. The rest of suit is dismissed. There will be no order as to costs of the suits. So far as costs of this appeal are concerned, plaintiff-respondent No. 1 shall bear the same for all parties.