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Suseela Ammal, Legal Representative of A. Sivasankara Mudaliar Vs. the Corporation of Madras by Its Commissioner - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Reported in(1973)2MLJ509
AppellantSuseela Ammal, Legal Representative of A. Sivasankara Mudaliar
RespondentThe Corporation of Madras by Its Commissioner
Cases ReferredMadura Municipality v. Muthusami Chettiar
Excerpt:
- .....to as the act) on 19th november, 1958. the respondent municipal corporation preferred a claim for betterment contribution, before the arbitrator under section 27 (1) of the act. the petitioner contend d that, though the land in question had increased in value, that increase was not due to the making of the town planning scheme and that consequently the respondent corporation was not entitled to levy betterment contribution in respect of the land of the petitioner. the arbitrator who disposed of the matter came to the conclusion that, though the land had increased in value, still that increase was not due to the making of the town planning scheme.in view of this, while fixing the value of the land as on the date of the publication of the notification under section 12 of the act, he held.....
Judgment:
ORDER

M.M. Ismail, J.

1. This is a petition under Section 115 of the Code of Civil procedure to revise the order of the Chief Judge of the Court of Small Causes, Madras, functioning as the Appellate Authority, dated 12th November, 1971, made in T.P.A. No. 2 of 1970. Admittedly the petitioner herein is the owner of a plot of land covered by the Mylapore-Teynampet Area Town Planning Scheme. The scheme was published under Section 12 of the Madras Town Planning Act, 1920 (Madras Act VII of 1920) (hereinafter referred to as the Act) on 19th November, 1958. The respondent Municipal Corporation preferred a claim for betterment contribution, before the Arbitrator under Section 27 (1) of the Act. The petitioner contend d that, though the land in question had increased in value, that increase was not due to the making of the Town Planning Scheme and that consequently the respondent Corporation was not entitled to levy betterment contribution in respect of the land of the petitioner. The Arbitrator who disposed of the matter came to the conclusion that, though the land had increased in value, still that increase was not due to the making of the Town Planning Scheme.

In view of this, while fixing the value of the land as on the date of the publication of the notification under Section 12 of the Act, he held that the respondent Corporation Was not entitled to levy contribution in respect of the land of the petitioner. Against this award of the Arbitrator the Corporation preferred an appeal, and the learned Chief Judge of the Court of Small Causes, functioning as the Appellate Authority : under Section 29 of the Act, reversed the conclusion of the Arbitrator and held that the land of the petitioner was liable to betterment contribution. The common case of the parties being that the value of the land had increased, the only question that had to be considered by the Appellate Authority was whether the increase in value was due to the making of the Town Planning Scheme or not. Purporting to follow the decision of a Full Bench of this Court in Balakrishna Mehta v. Corporation of Madras : AIR1962Mad7 , the Appellate Authority held that there was a statutory declaration that such an increase in value was, in the eye of the statute, the result of the making of the scheme and that it was not open to any party to claim that such an increase was due to circumstances other than the making of the scheme. In view of this conclusion of the Appellate Authority, he did not go into the question whether the increase in value was due to the making of the Town Planning Scheme or not, but merely proceeded to state that the Full Bench had decided that once there was an increase in value that increase was statutorily attributable to the making of the scheme and that the owner of the land had no right to put forward the case that the increase in value was not due to the making of the scheme, but was due to other circumstances. It is the correctness of this conclusion that is challenged before me in this revision petition.

2. I am clearly of the opinion that the Appellate Authority, namely, the Chief Judge of the Court of Small Causes, has thoroughly misunderstood the scope of the decision of the Full Bench of this Court referred to above. For the purpose of understanding this, it is necessary to refer to a few provisions of the Act. Section 23 of the Act states:

Where by the making of any town planning scheme the value of any property has increased or is likely to increase, the municipal council, if it makes a claim for the purpose within the time (if any) limited by the scheme not being less than three months after the date of publication of a notification of the State Government sanctioning a scheme under Section 14, shall be entitled to recover from the owner of such property an. annual betterment contribution for such term of years and at such uniform percentage of the increase in value not exceeding ten per centum as may be fixed in the scheme:

Provided that the aggregate amount of the contributions so recovered shall not exceed one-half of the maximum increase in value during the aforesaid term of years as ascertained under the next following sanction.

Section 24 provides for the method of calculation of betterment contribution and states:

The betterment contribution shall be levied according to the following principles:

(a) In respect of each property on which the contribution may be levied under Section 23, its market value at the date of the publication of the notification under Section 10, or Section 12, shall be estimated without reference to the improvements contemplated in the scheme.

(b) In each of the financial years following that in which the scheme takes effect under Section 14, Sub-section (6) the market value of each such property on the first day of April of that year shall be estimated by the chairman.

(c) If, in any financial year, the market value estimated under Clause (b) does not exceed that estimated under Clause (a), no betterment contribution shall be levied for that year.

(d) If, in any financial year, the estimated market value under Clause (b) exceeds that under Clause (a), the municipal council shall levy on the difference a betterment contribution according to the percentage fixed in the scheme:

Provided that in estimating the market value of land under Clause (a) or Clause (6), the value of buildings or other works erected or in the course of erection on such land shall not be taken into consideration.

Section 25 deals with the collection of betterment contribution and Sub-section (2) of that section is important and it provides:

(a) The State Government may make rules for the assessment and collection of the betterment contribution, and, subject to such rules, (i) the chairman shall have the same powers and shall adopt the same procedure for the assessment and collection of the betterment contribution as he has for the assessment and collection of the property tax, (ii) persons affected shall have the same right to receive notice of assessment and to object to the assessment and to appeal in respect of the property tax, and (iii) decisions on appeal shall to the same extent be final and conclusive; and (b) lands and buildings exempt from the property tax shall also be exempt from any betterment contribution.

Section 27 provides for the appointment of Arbitrators and Sub-section (1) states:

After a scheme has been sanctioned the State Government may and if so required by the council or any person interested in the scheme shall appoint an arbitrator with sufficient establishment to discharge all or any of the following duties....

(a) to pass such orders as may be required under Clauses (a) to (d) of Sub-section (2) of Section 5;

(b) to define, and, where necessary to demarcate, or cause the demarcation of, the reconstituted plots or the areas allotted to or reserved for the purpose mentioned in Clause (k) of Section 4;

(c) to decide, in reference to the claims made, whether any property is injuriously affected within the meaning of Section 20, and award the, compensation, if any, to be paid to the owner concerned, in accordance with the provisions contained in Chapter IV; and

(d) to determine, in reference to the claims made, the properties which are liable to the betterment contribution under Section 23 and estimate and record their market value at the date of the notification under Section 10 or Section 12, as the case may be, in accordance with the provisions of Clause (a) of Section 24.

Section 29 states:

(1) Any party aggrieved by any decision of the arbitrator under Clause (c) or Clause (d) of Sub-section (1) of Section 27 may, within three months from the date of the communication of such decision, appeal to the District Judge concerned in cases arising outside the City of Madras, and to the Chief Judge of the Court of Small Causes, is cases arising in the City of Madras.

Sub-section (2) of that section states:

The decision of the arbitrator under Clause (c) or Clause (d) of Sub-section (1) of Section 27, and when an appeal has been preferred under Sub-section (1), the decision on such appeal shall be read as part of the scheme sanctioned under Section 14 and shall be final and binding on all persons.

3. The statutory provisions make it clear that the Corporation will be entitled to levy betterment contribution only if it is established that the value of the property included in the scheme has increased or is likely to increase by the making of the scheme. If that fact is established, then the Corporation acquires a right to levy betterment contribution. How that contribution should be worked out is provided in Section 24. Therefore for the purpose of giving effect to the right of the Corporation to levy betterment contribution, the following questions have to be determined and the rights enforced:

(i) whether the property included in the scheme has increased in value or is likely to increases in value;

(ii) whether such increases in value or likelihood of increase is due to the making of the town planning scheme ;

(iii) the estimation of the market value of such property on the date of the publication of the notification under Section 10 or Section 12;

(iv) the estimation of the market value of such property on the first day of April of each of the financial years following that in which the scheme takes effect under Section 14;

(v) if the estimated market value of the land in any such financial year exceeds the market value of the land as on the date of the publication of the notification under Section 10 or Section 12, then betterment contribution shall be levied on that excess ;

(vi) if the estimated market value of the land in any such financial year does not exceed the estimated market value of the land as on the date of the publication of the notification under Section 10 or Section 12, no betterment contribution shall be levied.

4. These are the points that have to be determined with reference to the levy of betterment contribution. As for the machinery for determining these questions, Section 27 (1) (d), read with Sections 23 and 24 (a) enables the arbitrator to determine the first three questions,. viz. (i) whether there has been an increase or likelihood of increase in the Value of the property; (ii) whether the increase is due to the making of the town planning scheme, and (iii) what is the estimated market value of the property on the date of the publication of the notification under Section 10 or Section 12. It is against this award of the arbitrator an appeal is provided under Section 29 (1) to the Chief Judge of the Court of Small Causes. As I pointed out already, the statute contemplates the estimation of the market value of the property in each succeeding financial year after the scheme takes effect. By virtue of Section 24 (b) that estimate has to be made by the Chairman, who has been defined in Section 2 (1) of the Act as the Commissioner of the Corporation of Madras in the City of Madras and the Chairman of the Municipal Council in other municipalities. By virtue of Section 25 (2) (a) of the Act, the procedure for the levy of betterment contribution has been equated to the procedure for the levy or property tax under the provisions of the corresponding Municipal Act. It is against the background of these statutory provisions, the question has to be considered, viz., whether the conclusion of the Appellate Authority in the present case is right or wrong. As I pointed out already, the Appellate Authority proceeded to rely on the decision of the Full Bench of this Court referred to already.

5. In this context it becomes necessary to consider what this Court Was called upon to decide in that particular case. That was a case where, after the determination under Section 23 read with Section 24 (a) of the Act, had been made, the owner of the property did not take any steps challenging the same. Thereafter the Corporation made demands for betterment contribution on the basis of the increase in the value of the properties over their value as on the date of the publication of the notification as determined by the Arbitrator. The owner of the property preferred revision petitions to the Commissioner and on-the dismissal of those petitions he preferred appeals to the Council. On their dismissal he filed a suit in the civil Court for a declaration that the suit property was not liable to the levy of betterment contribution and for recovery of the amount so levied and collected. The question that had to be considered by the Full Bench was whether the civil Court had jurisdiction to entertain that suit or not. The matter came up to be considered by the Full Bench in view of an earlier decision of a Bench of this Court in Madura Municipality v. Muthusami Chettiar : AIR1954Mad454 . The Bench in that case took the view that the question of the right of the Municipality to recover betterment contribution on proof of the value of the property comprised in the scheme having increased or was likely to increase by reason of the making of the scheme Was not to be decided by the Arbitrator or any other machinery but had to be decided by the Municipal Council itself and that consequently there being no machinery provided for the determination of the question by the statute itself the civil Court had jurisdiction. It was this conclusion of the Bench that was reversed by the Full Bench. The Full Bench referred to the provisions to which I have already drawn attention and pointed out that a special machinery had been provided under the Act itself for determining the market value of the property as on the date of the publication of the notification under Section 10 or Section 12 and the subsequent value in each financial year as provided under Section 24 (b) of the Act. In view of the express provision contained in the statute for determining these questions the Full Bench came to the conclusion that the civil Court's jurisdiction must be deemed to have been ousted or excluded and that therefore the civil Court had no jurisdiction to entertain the suit. This is what the Full Bench observed:

In the present case we have found that for the determination of the particular question the statute has in. fact provided a remedy. At the earlier stage where the increase in value or the likelihood of increase in value is made the subject-matter of a claim the Act provides for the appointment of an Arbitrator with special, jurisdiction for the determination of that question. It goes further and states that subject to certain contingencies the decision of the arbitrator is final. It must necessarily follow that the normal forum of action for an aggrieved person in such cases is by the terms of the statute denied to the party. The creation of a special forum for the enforcement of the rights and obligations of contending parties in respect of a right or invasion of a right for the first .time created by the statute does, to our minds have the effect of denying to the civil Court any jurisdiction in that matter. We have already pointed out that with regard to the subsequent valuation there is in effect a statutory declaration that any increase in value is in the eye of the statute in question the result of the making of the scheme.. In the face of such a provision it is not open to a party to claim that such an increase in value is due to circumstances other than the making of a scheme. We have also pointed, out that in so far as the subsequent valuations are concerned they have been brought into line with the assessments of property tax and the special forms created in the relevant statute for the determination of questions and adjudication of disputes arising therefrom as also the effect of ousting the jurisdiction of the civil Court in that connection.

6. As I pointed out already the Full Bench was concerned only with the the jurisdiction of the civil Court and in the context of its conclusion that the civil Court had no jurisdiction, since the statute itself had provided for a particular remedy with respect to a particular grievance of the citizen, they made the above observations. However, those observations do not have the effect of providing for a statutory presumption, when an Arbitrator is called upon to -decide under Section 23 read with Section 27 (1) (d) the questions falling Within his jurisdiction, and shutting out the citizen from putting forward, the case that, though there has been an increase in the value of the property, that increase was not due to the making of the scheme. As I pointed out already, the statute contemplates the Arbitrator deciding three points, (i) Whether there has been an increase or likelihood of increase in the value of the property; (it) whether such increase is due to the making of the scheme, and (iii) an estimation of the market-value of the property as on the date of the publication of the notification under Section 10 or Section 12. With regard to all these three questions, the Arbitrator will have to arrive at a finding on the basis of the evidence placed before him by both sides and the statute itself does not provide for any presumption with regard to any of them. What the Full Bench has pointed out is that, once the Arbitrator has rendered his decision on the three questions referred to already, it will automatically follow that the property in question is liable to betterment contribution and that, therefore, when a subsequent estimate of the value for each financial year is made, it is not open to the owner of the property to reagitate the liability to betterment contribution again by praying for a declaration that such increase in the value of the property is referable to circumstances other than the making of the scheme. It is important to bear in mind the distinction between the initial valuation as contemplated by Section 24 (a) of the Act and the subsequent valuation as contemplated by Section 24 (b) of the Act and the statutory declaration referred to by the Full Bench applies only to the subsequent valuations under Section 24 (b) of the Act made by the Chairman and not to the initial valuation made under Section 24 (a) by the Arbitrator. This position is made amply clear in the judgment of the Full Bench and the above observations in the judgment could not have been misunderstood as having provided for such a presumption even with regard to the initial valuation. There can be no doubt Whatever that in this case what the Arbitrator was doing was to exercise jurisdiction under Section 24(a) read with Sections 23 and 27 (1) (d) and consequently he-was called upon to find out Whether the increase in the value of the petitioner's property Was due to the making of the town-planning scheme and to make an initial estimate of the market-value of the property as on the date of the publication of the notification under Section 10 or Section 12 of the Act and to the exercise of this jurisdiction the statutory declaration referred to by the Full Bench has no application whatever.

7. The result of this Will be that the Appellate Authority in the present case has failed to exercise the jurisdiction vested in him viz., the jurisdiction to find out whether the admitted increase in the value of the property was as a result of the making of the scheme or not. Since the Appellate Authority has not decided the question of fact as to whether the admitted increase in the value of the petitioner's property was due to the making of the town-planning scheme or not on an erroneous understanding of the Full Bench decision of this Court, I have no alternative but to remand the matter to the Appellate Authority in order to enable him to render a finding on the materials placed before the Arbitrator whether the admitted increase in the market-value of the property was due to the making of the scheme or not.

8. Under these circumstances the civil revision petition is allowed, the order of the Appellate Authority is set aside and the matter is remanded to the Appellate Authority for fresh disposal in accordance with law and in the light of the observations contained in this judgment. There will be no order as to costs.


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