1. This is an appeal by the plaintiff, Corporation of Calcutta, from concurrent decisions of a Munsif of Alipore and of a Subordinate Judge of the same place. The facts from which the present appeal arises are briefly the following. They are mostly admitted. Premises No. 88, Garden Reach Road were purchased by one Nitya Hari Mukherjee in auction in a title execution case. Nitya Hari Babu wrote to the Corporation of Calcutta, it is said about 11-1-1935, asking to be informed how much was due on account of the arrears of the municipal consolidated rates. The Corporation replied on 17-1-1935 (Ex. A) to the effect that Rs. 434-10-0 in all remained outstanding, and gave details of arrears from the third quarter of the financial year 1931-32 (that is, October to December 1931) continuously to the fourth quarter of the financial year 1933-34, also stating that bills from the first to the fourth quarters of the year 1934-35 were in the hands of the Collector, evidently for what may be termed 'current collection.' On 9-4-1935, Nitya Hari Babu paid Rs. 111 towards the arrears stated above. He sold the premises to the present defendant by a registered kobala, dated 6-7-1936, the purchaser retaining a sum of Rs. 823-10-0 as arrears of rates upto the end of 1934-35 and certain other sums on account of dues accruing later. Thereafter, the defendant paid to the Corporation certain sums towards the arrears of rates stated above. The present suit was based on a demand by the Corporation on the present defendant dated 10-12-1938 (Ex. 3A). This letter of demand was for arrears of consolidated rates including not only those contained in the letter, dated 17-1-1935 (Ex. A) but also rates for 'owners' and occupiers' bills from third quarter of 1926-27 to fourth quarter of 1928-29 amounting to Rs. 315-5-0. The defendant promptly informed the Corporation that he had purchased the premises on the basis that the total dues were those shown in the Corporation's letter, dated 17-1-1935 (Ex. 3, dated 22-12-1938). Certain correspondence ensued, and the Corporation gave the defendant an opportunity of paying by instalments, but the instalments appear to have been paid irregularly, and the suit was filed accordingly.
2. The contention in both Courts was that the plaintiff was estopped from recovering from the present defendant any sum in excess of Rs. 213-4-3. The defence of estoppel prevailed in both the Courts below. The learned Munsif considered the language of Section 115, Evidence Act and held that the Corporation could not deny the truth of its declaration made in its letter, dated 17-1-1935. The lower appellate Court went into certain questions of the authority of the officers of the Corporation, and held that Nitya Hari had no reason to disbelieve the correctness of the Corporation's letter. It, therefore, agreed with the learned Munsif that the Corporation's claim was partly barred by estoppel.
3. In this Court, the appeal has been argued on the question of estoppel : First, whether it can be pleaded against the Corporation as against the taxes which it is the statutory duty of the Corporation to realise, and in particular, whether the present defendant was in a position to plead estoppel so as to prevent the Corporation from realising the taxes by a sale of the house in arrears.
4. The question of estoppel against the statute does not appear to have been placed before the Courts below. It is an elementary principle that there is no estoppel against the law. The provisions of the present statute, the Calcutta Municipal Act, 1928, at present material are Sections 149, 205 and 213. Section 149 relates to taxes payable by the owners and occupiers of lands and buildings and fixes them with liability for the consolidated rate. Section 205, so far as at present material, runs thus : 'The consolidated rate due from any person in respect of any land...shall...be a first charge upon the said land....' Section 213 so far as at present material, runs as follows:
The Corporation may order to be struck of the books any sum due on account of the consolidated rate...which may appear to them to be irrecoverable.
It will be observed that the statute places the-liability for consolidated rate upon the land, makes it a first charge upon the land, and gives-the Corporation power to strike off dues whicb appear to be irrecoverable.
5. In this Court, the learned Advocate for the appellant relies on the decision reported in Maritime Electric Co. Ltd. v. General Dairies Ltd. . In that case, a private company in New Brunswick, being a 'public utility' company within the meaning of the Public Utilities Act, R.S. 1927, and consequently under specific statutory duties prescribing inter alia the charges that it was permitted to make, sold electric energy to a local dairy business, but owing to a mistake in calculation over a period of twenty, eight months, the dairy was charged with only one-tenth of the electric energy supplied. Their Lordships of the Privy Council held that the. Electric Company was not estopped from recovering the sum claimed; that the statutory duty was imposed on the Electric Company to charge and on the dairy to pay at scheduled rates for the electric current supplied and could not be defeated or avoided by a mere mistake in the computation of the accounts.
6. I would observe at the outset that no serious attempt was made by the learned Advocate for the respondent to distinguish the facte and I find that the facts cannot be distinguished. At p. 620 of the report, their Lordships observe:.the Court should first of all determine the nature of the obligation imposed by the statute, and then consider whether the admission of an estoppel would nullify the statutory provision.
In the present case, the obligation imposed by the statute is respectively to collect and pay the rates - these rates being secured by a first charge on the premises, and there being no power to remit the rates unless they appear to-be irrecoverable. At p. 621 of the report, their Lordships considered the position of the dairy company as against third parties to whom the dairy company might have paid more than they would have done otherwise had it not been for the mistake in calculation. Their Lordships held:
It is...clear that to disallow the estoppel will leave the respondents (dairy company) out of pocket to the extent of the increased amounts just referred to. It is an unfortunate result; but the obligation to obey a positive law is more compelling than a duty not to cause injury to another by inadvertance.
7. The facts not being distinguishable, I am bound to follow the decision. I hold, therefore, that no estoppel can be pleaded as against the Corporation.
8. The question whether estoppel can be pleaded by the present defendant was based on the position set up by the learned Advocate for the respondent that his client being a third party could not be bound by an estoppel as between the Corporation and the original ratepayer. The general finding is that there is no estoppel. Thus this question cannot in terms arise. On examining the matter from another aspect, in my opinion, the defendant auction-purchaser cannot be, placed in a better position than his vendor. The vendor sold the premises subject to certain liabilities for rates. The purchaser bought the premises subject to the game liabilities. These liabilities were the creatures of statute and calculated according to statute, and as the vendor could not, as held already defeat those liabilities by a plea of estoppel; so the purchaser, being in no better position than the vendor, could not either.
9. It only remains to deal briefly with the argument for the respondent that he is entitled to be protected as a bona fide purchaser for value. This defence was raised incidentally in para. 9 of the written statement, but no issue was framed, and the judgments of the Courts below show that there was no contention on this topic before them. Thus, the matter cannot be agitated at this stage as it would involve investigation of questions of fact. The learned Advocate for the respondent referred to the case reported in Akhoy Kumar v. Corporation of Calcutta 2 A.I.R. 1915 Cal. 478 where a purchaser of premises within the Municipality of Calcutta was sought to be fixed with arrears of consolidated rates on lands and buildings. In that case, a Division Bench of this Court considered at p. 636 of the report whether the appellants were purchasers for value without notice, and after considering matters of pleading observed at p. 638 that there was nothing to prevent the appellants from enquiring from the municipal authorities to ascertain the precise period for which the rates were in arrears. In the present case, there was nothing to prevent the respondent from making an enquiry direct from the Corporation. If he chose to rely on the letter of the Corporation to his vendor, without verifying it by direct reference to the Corporation, he did so at his own risk. The result is that the appeal succeeds. The judgments and decrees of the Courts below are set aside and the suit is decreed in full.
10. With regard to costs, I do not find that the Corporation has acted harshly and oppressively. No doubt, its mistake has been burdensome to the respondent inasmuch as it has saddled him with legal expenses which he would presumably not have incurred otherwise, but on the view I have taken the Corporation did nothing more than pursue its legal rights. Indeed, on my view of the statute, the Corporation had no alternative but to proceed to enforce its legal rights. On the other hand, the respondent has acted reasonably in going to the Courts for his redress; that he had at least a good prima facie case is indicated by his success in both Courts below. In my view, it would be unduly harsh to make him liable for the whole of the Corporation's costs. I, therefore, order that the appellant Corporation do get half costs throughout from the respondent.
11. Leave to appeal under Clause 15, Letters Patent is granted as prayed for in the respondent's application filed on 11-1-1946.