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Model Press (P) Ltd. Vs. Delhi Municipal Corporation and anr. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtDelhi High Court
Decided On
Case NumberCivil Miscellaneous (Main) Appeal No. 100 of 1976
Judge
Reported inAIR1978Delhi44; ILR1977Delhi462; 1977RLR195
ActsCode of Civil Procedure (CPC), 1908 - Order 39, Rule 1; Constitution of India - Article 227
AppellantModel Press (P) Ltd.
RespondentDelhi Municipal Corporation and anr.
Advocates: R.P. Sharma and; V.P. Singhal, Advs
Cases ReferredRameshwar Dayal v. Municipal Corporation of Delhi
Excerpt:
.....by the act. as the application was moved in a pending suit, the question of granting an ex-parte injunction does not arise as the defendant had already been served in the suit much earlier. the proper procedure in such cases is to give notice to the counsel for the defendant. the court should have some intimation of the immediate nature of the threat which would be defeated by the service of a notice. there can be threats of many types. the pulling down of houses; the threat of dispossession of ejectment from property or various other types of threats that would be utterly defeated in case an ex-parte injunction is not issued are examples of cases in which an interim injunction is issued ex-parte almost as a routine. however, if the threat is concerned with the recovery of taxes,..........amended further and now order 39, rule 3 of the code has a proviso to the effect that when an ex-parte injunction is proposed to be given, then the court shall record the reasons for coming to the conclusion that the object of granting the injunction would be defeated by delay. in case this procedure is followed, then the court has further to order the applicant to send notice and other documents expeditiously to the opposite party with a view to get a rapid decision. furthermore, rule 3-a has been introduced, stating that the court should endeavor to dispose of such applications within 30 days from the date on which the ex-parte injunction was granted. under this procedure, if an ex-parte injunction is granted, then reasons have to be recorded; documents have to be served in the.....
Judgment:

D.K. Kapur, J.

(1) This is a petition under Article 227 of the Constitution of India directed against a very short order passed by the Subordinate Judge trying the civil suit. The order in question was passed on an application under Order 39, Rules 1 and 2 of the Code of Civil Procedure. The order reads:-

'HEARD.Notice be directed to the defendant on P.F. for 7-4-76.'

The case of the petitioner is that in the circumstances of the case notice alone should not have issued but, an ex-parte order should also have been passed. The injunction prayed for in the suit was one to restrain the Municipal Corporation of Delhi from collecting property taxes in relation to some premises situated at Jhandewalan in New Delhi. It can hardly be denied that the provisions of Order 39, Rule 3 of the Code of Civil Procedure are in the following terms :-

'THECourt shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party.'

In view of this provision, the usual rule to be followed in the matter of injunctions, etc., is to give notice and hear both parties but, nevertheless, the Court has jurisdiction to grant an ex-parte order if the purpose of getting an injunction was likely to be defeated on account of the delay caused in issuing the notice. The Code of Civil Procedure has recently been amended further and now Order 39, Rule 3 of the Code has a proviso to the effect that when an ex-parte injunction is proposed to be given, then the Court shall record the reasons for coming to the conclusion that the object of granting the injunction would be defeated by delay. In case this procedure is followed, then the Court has further to order the applicant to send notice and other documents expeditiously to the opposite party with a view to get a rapid decision. Furthermore, Rule 3-A has been introduced, stating that the Court should endeavor to dispose of such applications within 30 days from the date on which the ex-parte injunction was granted. Under this procedure, if an ex-parte injunction is granted, then reasons have to be recorded; documents have to be served in the manner provided by the Rule, and also, the application has to be determined and decided within 30 days.

(2) The usual procedure is the one appearing in the unamended Order 39, Rule 3 of the Code, which requires a notice to be given before an order is passed. The learned counsel in support of the petition says that there are circumstances which would have justified an ex-parte order in the present case and I am now going to analyze, if there are any such reasons.

(3) The petitioner is a plaintiff in a suit which was instituted some time in the end of May, 1975. In that suit, the validity and legality of the property taxes sought to be collected on the property in question was challenged. It was contended that the assessing authority had not acted in accordance with the Delhi Municipal Corporation Act, while fixing the taxes. Apparently, the rateable value, and hence the assessment of property taxes for several years was under challenge. I will not go into the exact nature of the controversy arising in the suit because the suit is still pending and is apparently at a very early stage. As I have said, that after the suit had been pending for some time, the plaintiff applied for an interim injunction to restrain the Corporation from Collecting the property taxes during the pendency of the suit. The present petition states that two such applications were moved-one on 17th March, 1976, and the second on 23rd July, 1976. In both cases, the complaint of the petitioner is that notices were issued, but no ex-parte order was granted. Along with the present petition, the petitioner has not filed a copy of the applications for injunction, but I have gone through copies of the pleadings, etc., which have been shown to me for my examination by the learned counsel for the petitioner and I am basing my order on the same. In the application dated 17th March, 1976, the petitioner has stated that the assessment list has not been prepared in accordance with law and nor has any bill or notice of demand been served on the plaintiff. Further, it is stated that the defendant is trying to recover property taxes without following the mandatory provisions of law. Again, it is stated that on 24th January, 1976, some members of the staff of the defendant visited the premises and demanded Rs. 42,000.00 otherwise, they would execute a distress warrant. It was said:-

'THEplaintiff was not willing to pay property taxes as long as bill or notice of demand as required under the provision of law was served. Though the officials on behalf of the defendant left the premises, but they administered the threat to recover the amount under similar circumstances without issuing of bill or notice of demand at any time.'

Thus, the complaint of the plaintiff seems to be that without sending any bill for recovering taxes, some members of the staff of the Corporation were trying to recover Rs. 42,000 without adopting the procedure prescribed by the Act. As the application was moved in a pending suit, the question of grating an ex-parte injunction does not arise in my view, as the defendant had already been served in the suit much earlier. The proper procedure in such cases is to give notice to the counsel for the defendant. Furthermore, the subject-matter of the suit is concerned with the validity of the taxes, whereas the subject-matter of this injunction seems to be concerned with some wrongful acts allegedly committed by some persons who might not even be connected with the defendant's department. thereforee, the Court would naturally require a notice to be served on the Corporation to find out as to who these persons were who were demanding Rs. 42,000 and whether they were at all connected with the Corporation.

(4) It must be pointed out that I am making these remarks in view of what is stated in the application. Actually, it may well be that it is the Corporation's agents who are trying to recover taxes under a valid authority of a warrant issued by the Commissioner himself. This matter cannot be decided in an ex-parte manner because the cause of action mentioned in the application is something subsequent to the filing of the suit. Furthermore, as I have already pointed out, the code requires a notice to issue unless there is an immediate threat.

(5) I would not in any way like to limit the manner in which an ex-parte injunction is to be granted, but the Court should have some intimation of the immediate nature of the threat which would be defeated by the service of a notice. There can be threat of many types. The pulling down of houses; the threat of dispossession or ejectment from property or various other types of threats that would be utterly defeated in case an ex-parte injunction is not issued are examples of cases in which an interim injunction is issued ex-parte almost as of routine. However, if the threat is concerned with the recovery of taxes, it is not normally a threat which is immediate in nature. It takes time for the Tax Department to move its machinery to collect taxes. In such cases, notices should generally be issued. There can be exceptions to this also, where some immediate action is visibly threatened. Thus, I do not see anything wrong in the issue of a notice in the present case; the most that can be said against the order is that the period of notice which is about three weeks could have been shortened to about two weeks.

(6) Now taking some of the subsequent events into consideration, it may be noticed that after this petition was moved in this Court, an ex-parte order was passed by this Court as an interim measure which is in operation since March, 1976. Still, the application for an injuntion has not been decided by the Subordinate Judge. I am told that no hearing has taken place, probably because of the pendency of this case. It can hardly be denied that if the Court decides not to grant an ex-parte injunction, it must also see that the hearing after notice is not so much delayed as to lead to the inevitable defeat of the proceedings. Having decided to proceed by issuing a notice, the Court has to endeavor to decide the matter before the threat sought to be restrained materialises. In my view, the application should have been decided either on 7th April, 1976, or very shortly thereafter. There is no necessity for the proceedings remaining pending for another year.

(7) The learned counsel has referred to Rameshwar Dayal v. Municipal Corporation of Delhi, (Civil Miscellaneous Main No. 93 of 1976) decided on 19th May, 1976(1), by a Single Judge of this Court, in which it has been observed that when an ex-parte order is refused, the Court should record reasons for doing so. There is no reference to Order 39, Rule 3 of the Code in that judgment and I must observe that the law, as it stands, is exactly the reverse of what is mentioned in the judgment, because reasons have got to be given if an ex-parte order is passed. I may also point out that the change in law has been brought by a belief that many parties approaching the Courts are able to get ex-parte injunctions without adequate reasons, and are, thereafter, able to delay the proceedings, thus leading to considerable injustice. In order to off-set this possibility, the provisions of the Code of Civil Procedure have been amended, and a similar amendment has been made in respect of Article 226 of the Constitution also by the recent amendments. The object of these changes is to prevent the Court giving an ex-parte order except where it is really necessary.

(8) I may point out that I have based my conclusion on a consideration of the actual pleadings used by the petitioner in the application moved to the Court. If such an application is considered by the Court, it has to see for itself whether there is any ground for passing an ex-parte order. At least, there must be some material before the Court to convince it that it is necessary to proceed ex-parte. In this particular case, it is neither obvious from the application nor it is obvious from the circumstances. I have taken pains to see the circumstances, etc. as pleaded, I do not see that the circumstances justify an ex-parte order. There may be other facts or circumstances in this case which might have come to light or might have been brought to the notice of the Court which might have led the Court to pass an ex-parte order, but they are not to be found in the pleadings as they arc. thereforee, the order as paused is perfectly correct.

(9) I must also say that I have taken the liberty of analysing the provisions of the Code of Civil Procedure at some length in this case not because the circumstances are such, but because the situation faced by the Subordinate Judge is one which is very common. In a large variety of cases, a question arises whether an ex-parte order should be passed or not. If the Court is in doubt, it must lean towards the furtherance of the cause of justice which is to grant the injunction so that the subject-matter of the dispute may be preserved during the pendency of the case. In the present case, the question before the Court was one of payment of taxes. It is a money claim. The loss of money has never been considered to be an irreparable loss in the sense of loss of property or loss of rights, etc. Thus, there is a practice in the High Court not to grant stay in the case of money decrees, but in the case of property to stay dispossession, etc. This practice is based on a sound sense and logic. Hence, when an order claiming an injunction to restrain the Corporation from collecting taxes is claimed, there may be two different circumstances. There may be a case where a person is unable to pay the taxes and his house or other property has been attached, then the Court will grant an injunction to restrain the sale of that property or its alienation. There may be another case where a party has to deposit money with the Corporation. In such a case, the Court will be chary in granting an injunction. These are circumstances to be considered at the time when the question of the grant of an interim injunction, etc., arises before the Court. 9 HCD/77-7

(10) In analysing the facts and circumstances of the case, I have not dealt with the question as to whether the tax is actually validly or legally assessed in the present case. The case of the petitioner is that the procedure prescribed by the Delhi Municipal Corporation Act, 1957, has not been followed and certain notices have not been given. It has been mentioned by counsel for the respondent that in fact the procedure was followed and the petitioner was even heard. This is a matter which will be decided on the merits. I am assuming for the purpose of this decision that the procedure was not followed; this is the way in which the Court dealing with an injunction has to proceed. It has to be assumed that the plaintiff is right and then it has to be seen what is the possible result. As I have said, the only possible result may be that the property of the plaintiff may be attached or some other proceedings may be taken for recovery of taxes. Under Section 123 of the Delhi Municipal Corporation Act, 1957, the particular property concerning which the property tax has been assessed is subject to a first change in respect of the tax sought to be recovered. This has the effect of protecting the Corporation. In fact, this may help in determining the balance of convenience. But, at the same time, if the statutory charge is there, then there is no real threat within the meaning of Order 39, Rule 3 of the Code which may be defeated by delay unless that property is also threatened with sale which may be under Section 156 of the Act. There is also a possibility of the Corporation issuing a distress warrant for the recovery of taxes under a warrant issued under the signatures of the Commissioner under Section 57. As the amount of property tax in this case is fairly large, unless there is a real threat. I do not think that the Court should take into consideration the mere possibility of immovable property being attached in a case where immovable property is subject to a first charge as in the case of realisation of property taxes. On all these considerations, I come to the conclusion that the Court acted rightly in issuing a notice. It must also proceed to decide the matter expeditiously and in case the matter is delayed, pass an interim order to safeguard the interest of the parte concerned during the pendency of the proceedings. For instance, it may pass an order to the effect that the property should not be sold on some such order. Having now decided to dismiss this petition. I may also point out that as a result of these proceedings, an injunction is in operation restraining the corporation from recovering the taxes. That injunction will now have to be discharged. There is, however, one difficulty which has been pointed out to the effect that the case is fixed before the Subordinate Judge on 8th March, 1977, for argu- ments on the same injunction application concerning which this petition had been filed. It is just possible that those proceedings have not terminated because of this petition under Article 227 of the Constitution. To prevent any unfortunate consequences as a result of these proceedings coming to an end, I have decided to continue this injunction till 8th March, 1977. I do not say that this injunction is to be granted on hearing that application, but it is only granted because it has been granted earlier. This injunction will stand discharged on 8th March, 1977. The present petition is dismissed with costs.


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