MUNICIPAL CORPORATION OF DELHIversusC.L. BATRA

A                  MUNICIPAL CORPORATION OF DELHI
                                          v.
                                    C.L. BATRA

                                AUGUST 10, 1994

B             [B.P. JEEVAN REDDY AND SUHAS C. SEN, JJ.)

          Municipalities: Delhi Municipal C01poration Act :

          S.170(b )--l'ropeny ta:i.--Payment of admitted tax only-Not paying tax
C pending appeal--Stay of recovery of ta:i.--lnterim orders issued by Coun and
    extended from time to time-Validity of

          In this appeal, the grievance of the appellant- Corporation was that
    an interim order has been passed by the Delhi High Court by which the
    assessee has obtained stay of recovery of tax of about Rupees one crore,
D   and it was permitted to deposit only the admitted liability of Rs. 3,00,000
    in respect of the property in question. It was contended by the appellant
    that the said interim order has opened a flood gate and many other suits
    have been filed bypassing the statutory provisions of appeal; stay orders
    have been obtained in respect of demands totalling about Rupees twenty
    crores; and that the assessment have been completed in accordance with
E   law.

           The assessee contended that an authenticated Assessment List being
    condition precedent to any recovery proceeding and in the absence of such
    list, no recovery proceeding could be commenced.
F         Allowing the appeal, this Court

          HELD : 1.1. It has not been satisfactorily explained, why the
    statutory remedy of appeal was allowed to be bypassed. The Trial Judge
    was conscious of this aspect of the matter and the judgment of the Delhi
G   High Court in an earlier case. There is no explanation why even after this
    he entertained the suit and passed the Interim order. (507-A, CJ

          1.2. The assessee had filed a Writ Petition, praying for similar relief.
    When interim order was not granted on that Writ Petition, he withdrew
    the Writ Petition and filed this suit. This was an abuse of process of law.
H   No liberty was obtained from the Court to file a suit on the same cause of
                                         504
                            M.C.D. v. f;.L. BATRA                           505

action, when the Writ Petition was withdrawn. [507-C, DJ                           A
      1.3. As early as on January 6, 1984, in the case of Siliguri Municipality,
this Court had vacated an interim order staying recovery of tax. [507-D]

       1.4. In the instant case, there is no question of constitutional in-
validity of any provision of law. In fact, this Court held Section 170(b) of       B
the Delhi Municipal Corporation Act was intra vires and the District
Judge had oo jurisdiction to waive the condition of deposit or stay the
collection of tax, pending disposal of the appeal in the Court. It was,
however, pointed out that the District Judge bad the power to adjourn the
hearing of the appeal or pass interim orders enabling the assessee to pay          C
up the taxes before the appeal was actually beard and determined. But,
this power had to be exercised judicially bearing in mind the interests of
Revenue and the position of the cases before him. [508-D, E]

      1.5. No gro11nd was indicated for passing the interim order staying
recovery of tax. The order was passed even without deciding the question           D
of maintainability of the civil suit, and the interim order has been extended
from time to time. [509-C]

     1.6 Having regard to the law which is now well-settled, it is difficult
to understand how an interim order of stay of realisation of tax could be          E
passed in a case like this. The interim orders are set aside. The Delhi
Municipal Corporation will be at liberty to recover the taxes due. [509-D]

      Siliguri Municipality and Ors. v. Amalendu Das and Ors.,. [1984] 2
SCR 344; Assistant Collector of Central Excise, Chandan Nagar, West Bengal
v. Dunlop India Ltd. and Ors., [1985] 2 SCR 191 and Shri Shyam Kish ore            F
and others v. Municipal Corporation of Delhi and another, JT (1992) 35 SC
335, relied on.

        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4671 of
1994.
                                                                                   G
     From the Judgment and Order dated 16.12.93 of the Delhi High
Court in Suit No. 1851 of 1993.

        Arun Jaitley, Ms. Madhu Tewatia and Ranbir Yadav for the Appel-
lant.                                                                              H
    506                   SUPREME COURT REPORTS (1994] SUPP. 2 S.C.R.

A         Awadh Behari Rohtagi and R.P. Sharma for the Respondent.

          The Judgment of the Court was delivered by

          SEN, J. This appeal arises out of an interim order of stay passed by
    a Single Judge of the Delhi High Court dated 16.12.1993 in Suit No. 1851
B   of 1993. This suit was filed by the plaintiff, C.L. Batra, after the previous
    attempt to obtain interim order of stay filed in a Writ Petition (Civil Writ
    Petition No. 583/1992), which was dismissed as withdrawn on 27th
    February, 1992.


c that anTheinterim
                grievance of the appellant, Municipal Corporation of Delhi, is
                     order has been passed in this suit by which the assessee has
    obtained stay of recovery of tax of nearly one crore of rupees. The assessee
    was directed to deposit the admitted liability of Rs. 3,00,000 only in respect
    of the property, M/s. Grindlay Cinema Building, New Friends Colony, New
    Delhi.
D
          The interim order was extended from time to time. The last of such
    extension was granted on 16th December, 1993 in Suit No. 1851 of 1993.
                                                                          '
            The grievance of the appellant is that this interim order has opened
E    a flood-gate and many other suits have been filed bypassing the statutory
    ·provisions of appeal. Stay orders have been obtained in respect of demands
     totalling about Rupees twenty crores. The case of the appellant is that the
     assessments have been completed in accordance with law. Copies of the
     assessment orders have been annexed to the Special Leave Petition.

F         On behalf of the assessee, It has been contended that an authenti-
    cated Assessment List is a condition precedent to any recovery proceeding.
    In the instant case, there is no such list in existence. Therefore, no recovery
    proceedings can be commenced. It has been pointed out that written
    statement filed on behalf of tne Municipal Corporation was found inade-
G   quate and the written statement has to be amended. This necessitated the
    extension of the interim order. In the background of these facts, it cannot
    be said that the suit is not maintainable or the recovery proceedings should
    not be stayed.

            In our view, no interim order should have been passed in this case
H    at all for three reasons :
                       M.C.D. v. C.L. BATRA [SEN. J.]                    507

      Firstly, it has not been satisfactorily explained why the statutory A
remedy of appeal was allowed to be bypassed. The Trial Judge was
conscious of this aspect of the matter and judgment of the Delhi High
Court in an earlier case. In fact, he has recorded in his order dated 9th
September, 1993 this fact :

         " ....... I am conscious of the Order passed by the Division Bench     B
         of this Hon'ble Court in Abaskar Construction Pvt. Ltd. decided
         on 30.9.1991."

There is no explanation why even after this he entertained the suit and
passed the interim order.                                                       c
       Secondly, the assessee had filed a Writ Petition, praying for similar
relief. When interim order was not granted on that Writ Petition, he
withdrew the Writ Petition and filed this suit. This was an abuse of process
of law. No liberty was obtained from the Court to file a suit on the same
cause of action, when the Writ Petition was withdrawn.                          D
     Thirdly, as early as on January 6, 1984, in the case of Siliguri
Municipality & Ors. v. Amalendu Das & Ors., [1984] 2 SCR 344, this Court
bad vacated an interim order staying recovery of tax. In that case, it was .
pointed out : -                                                              E
        "The Court has to show awareness of the fact that in the case of
        a Municipality it cannot function or meet its financial obligations
        if its source of revenue is blocked by an interim order restraining
        it from recovering the taxes as per the impugned provision. The
        Municipality bas to maintain essential civic services, run public       F
        institutions, purchase supplies and pay the salaries of its employees
        etc. The grant of Jin interlocutory order would paralyze the ad-
        ministration and dislocate the entire working. These serious
        ramifications were lost sight of by the High Court in the instant
        case while making the impugned order."
                                                                                G
      In the case Assistant Collector of Cenlral Excise, Chandan Nagar, West
Bengal v. Dunlop India Ltd. and Ors, [1985] 2 SCR 191, it was held that
interim orders were not to be gtanted in' revenue matters merely because
a prima facie case had been shown. It was also emphasised in that case that
even assuming that the assessee bad established a prima facie case, it was      H
    508                    SUPREME COURT REPORTS [1994] SUPP. 2 S.C.R.

A   not a sufficient justification for granting the interim orders. It was observed:

             "It is only where statutory remedies are entirely ill- suited to meet
             the demands of extraordinary situations, as for instance where the
             very vires of the statute is in question or where private or public
             wrongs are so inextricably mixed up and the prevention of public
B            injury and the vindication of public justice require it, that recourse
             may be had to Art. 226. The Court must also have good and
             sufficient reason to bypass the alternative remedy provided by
             statute. Matters involving the revenue where statutory remedies
             are available are not such matters."
c          In the instant case, there is no question of constitutional invalidity of
    any provision of law. In fact, in the case of Sllri Shyam Kishore and others
    v. Municipal Coporation of Delhi and another, JT (1992) 5 SC 335, this
    Court held Section 170(b) of the Delhi Municipal Corporation Act was
    intra vires and the District Judge had no Jurisdiction to waive the condition
D   of deposit or stay of collection of tax, pending disposal of the appeal in the
    Court. It was, however, pointed out that the District Judge had the power
    to adjourn the hearing of the appeal or pass interim orders enabling the
    assessee to pay up the taxes before the appeal was actually heard and
    d~termined. But, this power had to be exercised judicially bearing in mind
    the interests of revenue and the position of the cases before him.
E
           The order dated 29-9-1993 and the subsequent orders that were
    passed, indicate that the Single Judge of the Delhi High Court had lost
    sight of the aforesaid considerations and interim orders were passed. In
    fact, the first interim order passed on 28-9- 1993 was to the following
F   effect:-            ·

             "28.9.1993

             Present: Mr: R.P. Sharma for the plaintiff. Mr. P.C. Jain, Sr. Clerk
             in the Law Office of the defendant in person.
G
             IA.7136 in S, 1851/93.

                Mr. P.C. Jain Senior Clerk in Law Office of the Defendant is
             present in Court in response to the notice issued to the M.C.D.
                      !                           '                            '
H               Time. is sought .to respond to the notice. The response be filed
                       M.C.D. v. C.L. BATRA [SEN, J.]                     509

         regarding maintainability of the Suit within a week. Response           A
         should be filed in each of the Suits.

             Till the next date of hearing there shall be no recovery proceed-
         ings. The admitted amount however be paid.

              A copy of the plaint, application, annexures and the documents     B
          relied upon be given to Mr. Jain today itself.

             Case for 18.11.1993."

No ground was indicated for passing the interim order staying recovery of
tax. The order was passed even without deciding the question of main-            C
tainability of the civil suit. This interim order has been extended from time
to time.

       Having regard to the law, which is now well-settled, we fail to say
how an interim order of stay of realisation of tax could be passed in a case
like this. Under these circumstances, we set aside the interim orders under      D
challenge. The Delhi Municipal Corporation will be at liberty to recover
the taxes due.

       The appeal is allowed. There will be no order as to costs.

G.N.                                                        Appeal allowed.      E