1. This judgment governs First Appeals Nos. 215, 216 and 217 of 1974. The Municipal Corporation of Greater Bombay challenges the decision of the learned Judge of the Bombay City Civil Court, (Shri H. Suresh), granting a declaration that the Corporation are not entitled to enforce the bills and notices of demand, under Section 203(1) of the Bombay Municipal Corporation Act, (for short 'the Act') against the respondent Prakash Cotton Mills unless these documents are issued expressly in the name of the Mills, A perpetual injunction is also granted restraining the Corporation from proceeding against the respondents under Section 203(1) ibid on the basis of these bills and demand notices.
2. The material facts necessary for the determination of question of law arising in these appeals are not in dispute. The respondents Prakash Cotton Mills Pvt. Ltd. are at present the owners of a large plot of land situated on Swami Vivekanand Road in Greater Bombay and popularly known as 'the Bombay Talkies Estate'. There are a number of structures on this plot. Originally this property belonged to National and Grindlay's Bank Ltd. as the sole trustees of the estate of the late Framroze Edulji Dinshaw. These trustees leased this property to Bombay Talkies Ltd. on a monthly rent of Rs. 2.000/-. The Bombay Talkies went into liquidation and it appears that since before 1963 or so the present respondents have been in occupation of the plot and the structures as owners. The immediate predecessors-in-title of the respondents were one M/s. Filmstan Pvt. Ltd. It appears that the rateable value for the several structures as fixed by the Corporation was challenged by the M/s. Filmstan Pvt. Ltd. for the year 1960-61 and 1961-62. Appeals against those decisions are still pending. The present respondents have also challenged the rateable values determined from 1963 onwards up to 1970. It is not in dispute that on April 11, 1972 the. respondents received a number of bills from the Corporation in respect of these structures, purporting to be issued under Section 200(1) of the Act. Property Tax for the first half of the year 1972-73 (from April to September 1972) was claimed under .these bills. On April 26, 1972 a set of demand notices was also received by the respondents from the Corporation, purporting to be under Section 202(1) of the Act. It is these bills and demand notices that are the subject matter of challenge in this litigation.
3. The respondents' case was that these bills and demand notices are invalid in law and not binding on them, inasmuch as they are not made out in their own names, but in the names of their predecessors-in-title, namely, the Bombay Talkies and/or M/s. Filmistan Pvt. Ltd. It was also urged that in view of the pendency of the previous litigation regarding the quantum and validity of fixation of rateable value, it was not permissible to the Corporation to issue the bills and demand notices in respect of the year 1972-73. According to the Corporation, the bills and notices served on the respondents duly complied with the requirements of Section 200(1) and 202(1) of the Act and were binding on them. According to the Corporation, it was not incumbent on them to expressly indicate the name of the respondents in these documents as claimed by them OF to wait till the decision of the previous litigation.
4. The second ground of attack based on the pendency of the previous litigation, did not find favour with the learned Judge of the lower Court. However, he was impressed by the first contention, namely, that the bills and the notices should have been issued in the names of the respondents expressly. After considering all the material provisions of the Act in detail, the learned Judge concluded that the omission on the part of the Corporation to make out the bills in the names of the respondents, disentitled them from proceeding against the latter under Section 203(1) of the Act by issuing, distress process. The learned Judge, however, ruled that it was open to the Corporation to proceed under Sections 211 and 212 of the Act. Accordingly subject to this qualification, he granted declaration and injunction as indicated in the opening paragraph of this judgment.
5. Now in these appeals before me the respondents do not challenge the decision of the learned trial Judge on points which are adverse to them. The only question therefore that survives for determination is whether the learned Judge's decision that the Corporation cannot take out proceedings against the respondents under Section 203(1) by issuing a distress warrant is correct. To reach this decision the learned Judge has mainly relied on a Division Bench ruling of the Calcutta High Court in Administrator, Uttarpara Kotrung Municipality v. Girija Prasad Paul : AIR1971Cal207 and another ruling of this Court in The Surat City Municipality v. Chabildas Dharamchand : AIR1914Bom22 . As I will presently show, both (these rulings are distinguishable on facts.
6. There can be no quarrel with the proposition laid down in these rulings to the effect that the right of distress depends upon the strict observance of the statutory formalities, it being a right conferred by the statute only on the compliance of all the conditions prescribed. The decision in the Calcutta case turned on the interpretation of Section 155(4) of the Bengal Municipalities Act. According to that provision the noticee of demand had to be served 'by a person authorised to receive payment'. The Court took note of the fact that only an employee of the Municipality who was authorised by it to collect money on its behalf had the power to serve the notice and consequently construed the phrase quoted above, to clearly imply personal service of the notice on the notice. In that view, it rejected the contention that postal service was also adequate. Turning to Section 200 (I) or Section 202 (I) of our Act it will be seen that there is no such restriction or qualification incorporated in either of these provisions, regarding the mode of service. As the subsequent discussion will show, for our purpose service as contemplated under Section 485 of the, Act will be adequate. The ratio of the Calcutta case is thus inapplicable here.
7. The Bombay case is under the District Municipalities Act. The bill presented under Section 82 of this Act was held to be invalid for the reason that it did not incorporate an intimation to the notice about his right of appeal. Inclusion of this intimation in the bill was obligatory in terms of Section 82(2)(b)(ii) of the aforesaid Act and omission to comply with this obligatory requirement was held by this Court to vitiate the notice. Now the validity of the bills served in the present matter is not challenged on this ground. The Bombay case also, it follows, cannot be pressed in aid by the respondents.
8. As there is no ruling directly on the question arising in these appeals it will have to be decided on first principles. Now there cannot be any doubt that a taxing statute is to be strictly construed as pithily enunciated by Lord Cairns in his oft quoted classic passage :
If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. In other words, if there be admissible, in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute, where you can simply adhere to the words of statute.
There are however recognised limits on the operation of this rule of strict construction. One of them is that the rule applies primarily to charging provisions in a taxing statute and has no application to a provision not creating a charge but laying down machinery for its calculation or procedure for its collection, and such machinery provisions have to be construed by the ordinary rules of construction. One important consideration in construing a machinery section is that it should be so construed as to effectuate the liability imposed by the charging section and to make the machinery workable - ut res valeat potius quam pereat. (See pages 441, 442 and 457 of the Principles of Statutory Interpretation by C. F. Singh 2nd Edition 1975). This distinction between charging provisions and machinery provisions is recognised by the Supreme Court in quite a few cases vide N. B. Sartjana v. Elphinstone Spinning & Weaving Mills : 1973ECR6(SC) , Gursahai v. C.I.T. : 1ITR48(SC) , and the other cases referred to in the foot notes of the above book on page 457. This distinction was present to the mind of the learned Judge of the lower Court also, but he was mainly influenced by the Calcutta ruling to hold that service for the purposes of Section 200(1) and 202(1) of the Act have to be personal service, with the necessary consequences that the notice must be made out specifically in the names of the respondents themselves. I shall presently point out that this conclusion is not right.
9. A quick survey of the relevant provisions of this Act having bearing on the matter in dispute will not be out of place. Section. 146 deals with the aspect as to the person primarily liable for payment of the property taxes. Section 149 enacts that where the title of any person primarily liable is transferred, it will be the duty of the transferee as well as the transferor to notify the transfer to the Corporation normally within three months. Section 151(1) provides that a defaulting transferor will continue to be personally liable until he gives necessary notice to the Corporation. Sub-section (2) of this section expressly declares that the failure on the part of the transferor shall not in any way diminish the liability of the transferee for the property tax. Section 209 of the Act makes provision as to the circumstances in which the property tax can be recovered from occupiers also. Under Section 156, the Commissioner of the Corporation is required to maintain a register, called assessment book, in which details about every property, taxes levied thereon and persons liable to pay them must, inter alia, be recorded. Section 159 provides that where the name of the person primarily liable for the payment of property-tax cannot be ascertained it will be sufficient to designate such person in the assessment-book as well as in any statutory notice as 'the (sic)der' of the premises without any further description, Section 211 says that the usual remedy of suit will be available to the Corporation against any defaulter in addition to the summary remedy of distress. Section 212 declares arrears of property-tax to be a first charge on the property concerned subject only to the prior right of the State Government to recover land revenue. All these provisions read together clearly manifest the scheme of the Act to be to ensure that property-tax does not remain unrealised in any .circumstances and to this end comprehensive machinery is provided to bring results in all possible contingencies.
10. This takes me to Section 485 which provides for modes of service of notices and other documents under the Act :
485. When any notice, bill, schedule, summons or other such document is required by this Act, or by any regulation or by-law made under this Act, to be served upon or issued or presented to the owner or occupier of any building or land, shall not be necessary to name the owner or occupier therein, and the service, issue or presentation thereof shall be effected, not in accordance with the provisions of the last preceding section but as follows, namely : -
(a) By giving or tendering the said notice, bill, schedule, summons or other document to the owner or occupier, or if there be more than one owner or occupier, to any one of the owners or occupiers of such building or land; or
(b) if the owner or occupier or no one of the owners or occupiers is found, by giving or tendering the said notice, bill, schedule, summons or other document to some adult male member or servant of the family of the owner or occupier or of any one of the owners or occupiers; or
(c) if none of the means aforesaid be available by causing the said notice bill, schedule, summons, or other document to be affixed in some conspicuous part of the building or land to which the same relates.
11. The opening part of this section makes it clear that it shall not be necessary to name owner of occupier in the notice and if the service is effected by any of the three modes prescribed in Sub-clauses (a), (b) and (c) it will be valid for the purposes of the Act. Now there is nothing either in this section or in Sections 200 and 202 to indicate that service, as contemplated by Section 485 will not apply to the services of a bill under Section 200 or to the service of a demand notice under Section 202. I am aware that there is a provision in the Bengal Municipalities Act also analogous to Section 485 of ur Act. But I would repeat that in order to conclude that personal service of demand notice was obligatory, Sabyasachi Mukharji J. (as he then was) substantially relied on the specific language of Section 105(4) of the Bengal Municipalities Act, which in terms provided that demand notice must be served by 'a person authorised to receive payment' on behalf of the Municipality. The learned Judge interpreted this condition to imply personal service on the notices. There is no similar restriction incorporated in Section 200 or Section 202 of our Act in express terms or even by clear implication. I am, therefore, of the view that the service of bill for the purposes of Section 200 or of the demand notices for the purpose of Section 202 of the Act has to be effected according to the modes prescribed by Section 485 of the Act.
12. The last question that survives for consideration is whether the service of the bills and demand notices on the respondents as effected by the Corporation is in accordance with Section 485 of the Act. As will be seen, some of the bills state the name of the respondents on the reverse. Quite a few of the documents do not give the respondent's name or address at all. In most of the documents, we find incorporated the words 'The Bombay Talkies Ltd.' or 'Filmstan Ltd.' (F. E. Dinshaw Khot) in the space on the obverse meant to give description of property in respect of which the tax is due (for example, name of the property, street and Ward number etc.). Now as already pointed out, Sections 159 as well as 485 of the Act permit the Corporation not to mention the name of the owner or occupier of the premises concerned on the bill or notice. I am alive to the position that the provisions of Section 203 of the Act must be strictly complied with, in view of the fact that they involve issue of distress warrant. All the same it will amount to overreaching ourselves, if we read into this section any restriction to the effect that the service of demand notice has to be personal service, if such restriction is not warranted on a true construction of the relevant provisions. The learned trial Judge would on his own showing not have hesitated to uphold the validity of the notices/bills, if the Corporation had described the respondents as 'holders' of the premises. I cannot persuade myself to agree with him that incorporation of words 'Filmstan Ltd. (F. E. Dinshaw Khot') or 'Bombay Talkies Ltd.' in the space meant for description of the property, vitiates the bills /notices in any way. It is true that Section 202 of the Act prescribes the form in which demand notice is to be issued. But then this section itself affords a clear indication that the phraseology of the form need not be rigidity adhered to in every case, when it states that the notice may be in the form in Schedule I or 'to the like effect'. Section 203 providing for issue of distress is one of the machinery provisions in the Act for recovery of arrears. When it is harmoniously construed with other relevant sections, in particular Sections 140 and 485, no doubt is left that the manner in which the Corporation has served bills/notices on the respondents will have to be upheld. After all, the respondents who even admit their liability for payment of tax in respect of the suit property - they only deny the quantum - were not any way misled by the mode of service adopted by the Corporation. The service of bills/demand notices on the respondents for the purposes of Section 203 of the Act is perfectly valid in law.
13. For these reasons I hold that the learned Judge of the lower Court was in error in granting the respondents the qualified relief of declaration and injunction. He should have dismissed the suits. Accordingly these three appeals are allowed. The respondents' suits stand dismissed. The lower Court has not made any orders about the costs. As the question raised was not entirely free from difficulty, no order is made regarding costs of these appeals also. Parties should bear their own costs throughout as incurred.