TATA MOTORS LTD.versusTALATHI OF VILLAGE CHIKHALI AND ORS.

                     (2011] 7 S.C.R. 863


                    TATA MOTORS LTD.                            A
                              v.
        TALATHI OF VILLAGE CHIKHALI AND ORS.
             (Civil Appeal No. 10187 of 2010)
                        JULY 4, 2010
                                                                B
     [R.V. RAVEENDRAN, P. SATHASIVAM AND A.K.
                   PATNAIK, JJ.]       .

       Maharashtra Land Revenue Code, 1966: ss.39, 168 -
 Non-agricultural cess - Liability to pay - Lease of land granted c
 to the appellant by the Pimpri-Chinchwad New Development
 Authority - Demand on the appellant for payment of non-
 agricultural cess - Challenged by appellant on the ground
 that it was a government lessee and, therefore not liable to
 pay the amount demanded and in the alternate, appellant D
 took plea that it was tenant of the Development Authority and
 demand for non-agricultural assessment could be made only
 on the Development Authority and not against the. tenant -
 Held: s~2(11) rlw s.38 defines a 'government lessee' as a
 lessee under a lease granted by a Collector in regard to E
 unalienated unoccupied land belonging to the government -
 In the instant case, the land was not leased by the Collector
 to the appellant - The lease deed stated that the lands leased
  were held by the Development Authority - There was also
 nothing to show that the lands belonged to government and
 that the Development Authority granted the lease in favour F
 of appellant, acting as an agent of the state government -
  Therefore, the leased lands were not government lands and
 the lessor was not the government - Therefore, the contention
 that the appellant was a 'government lessee' and, therefore,
.not liable to pay the non-agricultural assessment is rejected G
 - However, by virtue of Pimpri-Chanchwad New Town
 Development authority (Disposal of Land) Regulations, 1973
 rlw the lease deed statutory liability was imposed on the
 appellant-lessee to pay the non-agricultural assessment to the
                               863                                H
    864      SUPREME COURT REPORTS                  [2011] 7 S.C.R.


A   state government - Having regard to the statutory liability
    created under the 1973 Regulations, the position of the
    lessee would be similar to a tenant referred to in sub-section
    1(c) of s. 168 which provides that in case of land in possession
    of a tenant, such tenant if he is liable to pay land revenue
8   therefor under the relevant tenancy laws, shall be primarily
    liable to the state government for the payment of land revenue,
    including all arrears - The liability of the appellant as tenant,
    to pay the land revenue, though not under a 'tenancy ·law' in
    its strict sense, but is nevertheless under a statutory regulation
c   governing the tenancy and, therefore, the demand by the state
    government directly against the appellant, can be justified by
    the principle underlying s.168(1)(c) - Maharashtra Regional
    and Town Planning Act - ss.113, 114 and 118 - Pimpri-
    Chanchwad New Town Development authority (Disposal of
0   Land) Regulations, 1973 - Regulations 10(iv), (v) - Land laws
    and agricultural tenancy.

        Words and phrases: Word 'occupant' - Meaning of, in the
    context of Maharashtra Land Revenue Code, 1966.

E     The appellant was granted a lease of land under
    leas~deed dated 3.1.1995 by Pimpri-Chinchwad New
  Development Authority for a term of 99 years
  commencing from 21.11.1994. The appellant utilised the
  said plot and the adjoining plot obtained on lease from
F Maharashtra Industrial Development Corporation (MIDC)
  for construction of factory. The appellant commenced
  construction of its plant and on completion commenced
  actual use for industrial purpose in 1999. The competent
  authority served demand notices on the appellant for
G payment of non-agricultural cess and additional non-
  agricultural cess for the period 1995-96 to 2001-02. The
  appellant filed writ petition before the High Court
  challenging the demand notices on the ground that it
  being a "government lessee" was not liable to pay the
H demand amount. The appellant also took an alternate plea
    TATA MOTORS LTD. v. TALATHI OF VILLAGE             865
             CHIKHALI AND ORS.

that it was a tenant of the Development Authority and         A
was, therefore, not liable to pay the non-agricultural cess
assessment under the provisions of the Maharashtra
Land Revenue Code, 1966.
     The High Court rejected the contention of the B
appellant that it was government lessee. It held that as a
lessee under the Development Authority, the appellant
was liable to pay the non-agricultural assessment. The
High Court, however, held that having regard to section
115 of the Code, non-agricultural assessment could be C
levied only with effect from the date on which the land
was actually used for non-agricultural purpose, and as
appellant commenced actual non-agricultural use in the
year 1999, the non-agricultural assessment was due by
it only from 1999-2000. As a consequence, the High Court
allowed the writ petition in part, quashed the demand
                                                           0
relating to the period 1995~96 to 1998-99 and upheld the
claim for the non-agricultural assessment from the year
1999-2000 onwards.

    The questions which arose for consideration in the        E
instant appeal were whether the appellant was a
'government lessee' and, therefore, not liable to pay the
non-agricultural assessment and whether the appellant
was a tenant of.the Development Authority and the
demand for non-agricultural assessment could be made          F
only on the Development Authority and not against the
tenant.

    Dismissing the appeal, the Court

     HELD: 1.1. Section 39 of the Maharashtra Land            G
Revenue Code, 1966 makes the occupant liable to pay
the land revenue and Government lessee to pay rent
fixed. The expressions "to hold land" or "to be a land
holder or holder of land" is defined in section 2(12) and
mean to be lawfully in possession of land, whether such       H
    866-    SUPREME COURT REPORTS              [2011] 7 S.C.R.


A   possession is actual or not.· It is not in dispute that the
    land in question is unalienated land and that in regard to
    such land, only the 'occupant' as defined in the Code is
    primarily liable to pay the non-agricultural assessment to
    the state government. Section 2(23) makes it clear that
B   where the land is in the actual possession of a tenant, the
    superior landlord or the land holder is deemed to be the
    occupant. It is also not in dispute that the Pimpri-
    Chinchwad New Development Authority is the 'occupant'
    and the appellant is not the occupant, but only a tenant
c   under the occupant. There is no dispute that a
    government lessee is not liable to pay any land revenue.
    Section 2(11) read with section 38 defines a 'government
    lessee' as a lessee under a lease granted by a Collector
    in regard to unalienated unoccupied land belonging to
    the government. In this case, the lands in question for
0
    which the non-agricultural assessment was demanded,
    were not leased by the Collector to the appellant. The
    lease deed states that the lands leased were held by the
    Development Authority, and the lessor is the
E   Development Authority. Therefore the leased lands were
    not government lands and the lessor was not the
    government. There was also nothing to show that the
    lands belonged to government and that the Development
    Authority granted the lease in favour of appellant, acting
    as an agent of the state government. A lessee of the
F   Development Authority is not a gover:nment lessee as the
    Development Authority is not the government and the
    lease lands are not government lands. Therefore, the
    contention that the appellant was a 'government lessee'
    and, therefore, not liable to pay the non-agricultural
G   assessment is rejected. [Paras 4-6] [875-B-C; 876-8; 877-
    H; 878-A-B]
      1.2. The appellant relied upon a state government
  Circular dated 29.3.1975 which clarified that as on that
H date, Maharashtra Industrial Development Corporation
    TATA MOTORS LTD. v. TALATHI OF VILLAGE            867
             CHIKHALI AND ORS.

(MIDC) was the agent of the state government and,            A
therefore, not liable to pay any assessment to the
government in respect of the lands held by it as agent of
the state government; that any lessee under MIDC would,
therefore, become a governmeht lessee and will not be
liable to pay the non-agricultural assessment under the      s
provision of Code, and that consequently the industrial
lessees, under MIDC, were not required to pay any non-
agricultural assessment in addition to the lease money.
The question whether the appellant is liable to pay non-
agricultural assessment in regard to the land taken on       c
lease from the Development Authority will have to be
decided with referen(:e to the relevant statutory
provisions and the terms of lease and not with reference
to position prevailing with reference to some other lease
taken by the appellant from MIDC. The status, objects,
                                                             0
functions and area of operation of MIDC and th.e
Development Authority are different. Any decision or
clarification issued in regard to lands held by MIDC or
lands leased by MIDC will not apply to lands held or
leased by the Development Authority. The circular dated
29.3;1975 relied upon by the appellant is not relevant as    E
it applies only to lessees of MIDC, which as agent of the
state government granted certain leases· and
consequently such lessees as government lessees were
exempted from paying the non-agricultural assessment.
The said notification did not refer to Pimpri-Chinchwad      F
New Town Development Authority as the agent of the
state government in regard to grant of leases to appellant
and others. In fact there was no document which showed
the state government to be the owner of the lands leased
by the Development Authority, nor any document to            G
show that the state government had either constituted or
recognized the Development Authority as its agent in
regard to leased land$. [Paras 7, 8] [878-G-H; 879-A-B-E-
H; 880-A-B]
                                                             H
    868    SUPREME COURT REPORTS             [2011] 7 S.C.R.


A      1.3. It is evident from section 113, 114 and 118 of
  Maharashtra Regional and Town Planning Act (MRTP Act)
  that the Development Authority is a body corporate which
  can acquire, hold, manage and dispose of land. The fact
  that the Development Authority requires the consent of
B the state government to dispose of any of its land by way
  of leases in excess of 99 years will not alter the position
  that the lands leased are lands of the Development
  Authority. There is no provision in MRTP Act which
  requires the New Town Development Authority, to hold
c and dispose of any government land as agent of the state
  government. In contrast, MRTP Act contains a specific
  provision enabling the state government to require a
  corporation or company (other than a New Town
  Development Authority, which is specific to a new Town),
0 to execute development work and dispose of its lands as
  its agent. MIDC is a corporation which would fall under
  sub-section 113(3A) whereas the Development Authority
  falls under section 113(2) of MRTP Act. The circular
  issued with reference to MIDC was, therefore, of no
E assistance to contend that land leased by the
  Development Authority to appellant was a government
  land. The contention of appellant that the Development
  Authority !s the agent of state government and that the
  appellant is a government lessee are, therefore, rejected.
F [Para 10] [881-H; 882-A-E; 883-B-C]

       2.1. There is no dispute that section 39 of the Land
  Revenue Code, fastens liability to pay land revenue upon
  the occupant and not on the tenant of the occupant.
  Section 168(1)(a) of the Code also reiterates that in the
G case of unalienated land, the occupant shall be primarily
  liable to the state government for making the payment of
  land revenue including all arreari:;. Sub-section (2) of
  section 168 provides that in case of default of the person
  primarily liable, the land revenue shall be recoverable
H from any person in possession of the land. It is no doubt
     TATA MOTORS LTD. v. TALATHI OF VILLAGE             869
              CHIKHALI AND ORS.

  true that the primary liability to pay the land revenue      A
  which includes non-agricultural assessment is on the
  occupant, under Section 39 of the Code. The definition
. of 'occupant' excludes not only 'government lessee' but
  also every tenant. Whenever the person in actual
  possession of the land is the- tenant, the land holder or    8
  the superior landlord who granted the lease to such
  tenant is deemed to be an occupant. In this case the
  appellant has taken the lease from the Development
  Authority and therefore the Development Authority as the
  landlord and occupant, will be primarily liable to pay the   c
  land revenue. [Paras 11, 12] [883-D-H; 884-A-E]

      2.2. In exercise of the powers conferred by Section
 159 of the MRTP Act, the Development Authority, with the
 previous approval of the state government, has made
 regulations for regulating the disposal ·of land acquired . D
 by it or vesting in it in the Pimpri-Chinchwad New Town,
 known as the "Pimpri-Chinchwad New Town
 Development Authority (Disposal of Land) Regulations,
 1973". Regulation 1(ii) provides that the said Regulations
 shall apply to the lands acquired by or vested in the E
 Pimpri-Chinchwad New Town Development Authority for
 the development of Pimpri-Chinchwad New Town.
 Regulation 5 provides that the Development Authority
 may from time to time dispose of plots of land on lease,
 to the persons eligible, in consideration of a premium and F
 an annual ground rent. Part IV of the Regulation contains
 the conditions of lease. Regulations 10(iv) and 10(v)
 relating to the question of payment of.rates and taxes and
 land revenue and cesses. Regulation 16 provides that in
 the event of conflict between the Regulations and G
 provisions of a lease deed entered into by the
 Development Authority, the provisions of the Regulations
 will prevail. There is however no conflict between the
 Regulations and the terms of the lease. Clause 2(c) of the
 lease deed dated 3.1.1995 between the Development H
                            i   :
    870     SUPREME COURT REPORTS               [2011] 7 S.C.R.


A   Authority as lessor and appellant as lessee, reiterates the
    terms and conditions of lease contained in the
    Regulations by providing that the lessee would be liable
    to pay any future rates or taxes recoverable under law
    from the lessee. Thus there is a statutory liability upon
B   the appellant as lessee to· pay the la11d revenue (non-
    agricultural assessment) to the state government.
    Section 39 of the Code makes the Development
    Authority, as 'occupant', liable to pay the non-agricultural
    assessment and the said liability is, in turn, statutorily
c   passed on to the appellant as lessee under the
    Regulations 10(iv) and (v) and the clause 2(c) of the lease
    deed. [Paras 13, 14] [884-F-H; 885-A-D-G]

        Nagpur Improvement Trust v. Nagpur Timber Merchants
    Association 1997 (5) SCC 105: 1997 (3) SCR 21 - referred
D to.
       2.3. Whether the demand for land revenue could be
  directly made against the lessee of the occupant, when
  the land revenue code makes the occupant primarily
E liable. But for the statutory obligation created under
  regulation 10(iv) and (v) of the Regulations, in the normal
  course, a demand should have been made upon the
  occupant (landlord) who is primarily liable and only if the
  landlord fails to pay, recourse could be had to sub-
F section (2) of section 168 which enabled a claim being
  made against the tenant in terms of the said sub-section.
  But where the liability to pay.land revenue is fastened on
  the lessee under the statutory regulations, it is not
  necessary for the state government to make a claim upon
G the occupant, leading to a demand by the Development
  Authority, in turn, upon its lessee, for payment of land
  revenue. The state government can directly make the
  demand on the lessee, by taking note of the liability
  statutorily fastened on the lessee under the Regulations.
  When the liability of the lessee to pay the land revenue
H
     TATA MOTORS LTD. v. TALATHI OF VILLAGE ·          871
              CHIKHALI AND ORS.

· is not open to challenge, having regard to the provisions A
  of the Regulations and terms of the lease, no purpose
  would be served by requiring the state government to
  recover the amount from the Development Authority
  (occupant) and then require the Development Authority
  to make a demand upon the lessee to recover the B
  amount. Having regard to the statutory liability created
   upon the lessee, under the Pimpri-Chinchwad New Town
   Development Authority (Disposal of land Regulations),
  1973, the position of the lessee would be similar to a
  tenant referred to in sub-section 1(c) of section 168 of the c
  Code which provides that in the case of the land in
  possession of a tenant, such tenant if he is liable to pay
  land reve!lue therefor under the relevant tenancy laws,
  shall be primarily liable to the state government for the
  payment of land revenue, including all arrears. The D
  liability of the appellant as tenant, to pay the land revenue,
  though not under a 'tenancy law' in its strict sense, but
  is nevertheless under a statutory regulation governing
  the tenancy and therefore the demand by the state
  government directly against the appellant, can be
  justified by the principle underlying section 168(1)(c) of E
  the Code. A demand can directly be made upon the
   lessee, the lessee can give a representation or file
  objections before the revenue authorities of the state
  government, if it has any grievance in regard to the
  determination of the quantum of the non-agricultural F
  assessment or the demand therefor. [Paras 15, 16] [886-
  A-H; 887-A-D]

      2.4. Sub-section (2) of section 168 of the Code, no
 doubt, provides that in case of default by any person who     G
 is primarily liable under sub-section (1), the land revenue
 including arrears shall be recoverable from any person
 in possession of the land provided that where such
 person is a tenant the amount recoverable from him shall
 not exceed the de·mands of the year in which the              H
    872      SUPREME COURT REPORTS              [2011) 7 S.C.R.


A recovery is made. This sub-section no doubt implies the
  demand should be made upon the occupant and only if
  the occupant defaults, a demand can be made upon the
  person in occupation, that is the lessee. Sub-section (2)
  of section 168 will operate where the tenant is not
B primarily liable under section 168(1) of the Code, or where
  there is no statutory liability upon the lessee to bear and
  pay the land revenue. The procedure under sub-section
  (2) would apply where the liability to pay the land revenue
  is on the lessor, and where the lessee is not liable
c therefor or where the liability of the lessee to pay the land
  revenue is merely contractual, as contrasted from a
  statutory obligation. Where the liability of the lessee is a
  statutory liability, there is no reason why that recovery
  should be delayed and protracted by requiring a demand
0 by the ·state government on the lessor and a
  consequential demand by the lessor on the lessee. If the
  lessee commits default in paying the land revenue, it may
  amount to a breach leading to re-entry under clause (4)
  of the lease deed. Be that as it may. However, having
E regard to the pendency of these proceedings, if the
  payment of the land revenue dues is made within four
  months from today it shall not be treated as a default or
  breach of the terms of the lease deed for the purpose of
  re-entry. In view of that there is no error in the order of
  the High Court. However the appellant is given liberty to
F file representations/objections before the concerned
  Revenue Authority, if it has any objection or grievance in
  regard to the quantum of non-agricultural assessment
  claimed in regard to the property leased to it. As the
  appellant had the benefit of interim stay against recovery,
G the appellant shall be liable to pay interest on the arrears/
  dues at the rate of 9% per annum from 26.2.2002. (Paras
  17, 18] (887-D-H; 888-A-D]
                        Case Law Reference:
H         1997 (3) SCR 21         referred to          Para 14
    TATA MOTORS LTD. v. TALATHI OF VILLAGE                 873
             CHIKHALI AND ORS.

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.                    A
101a1 of 2010.

    From the Judgment & Order dated 4.7.2007 of the High
Court of Judicature at Bombay in Writ Petition No. 1435 of
2002.
                                                                       B
    R.F. Nariman, Kavin Gulati, Nandini Gore, Debmalya
Banerjee, Abhishek Ray, Manik Karanjawala for the Appellant.

    Madhavi Divan, Sanjay Kharde, Asha Gopalan Nair,
Shivaji M. Jadhav for the Respondents.                                 c
    The Judgment of the Court was delivered by

      R.V.RAVEENDRAN, J. 1. Under Lease Deed dated
3.1.1995, Pimpri-Chinchwad New Town Development Authority
(6th respondent herein - for short 'the Development Authority')        D
granted a lease of land measuring 164.5 acres in Sectors
No.15 and 15A in Village Chikhali, Taluka Haveli, District Pune,
converted to industrial use, to the appellant herein for a term
of 99 years commencing from 21.11.1994. The consideration
for the lease was a premium of Rs.17,91,40,500/- (at the rate          E
of Rs.25/- per sq.ft.) paid by the appellant apart from a yearly
rent of rupee one. The appellant utilized the said plot and
adjoining plot obtained on lease from Maharashtra Industrial
Development Corporation (for short 'MIDC') for construction of
its factory. The appellant commenced construction of its plant         F
in or about the year 1997 and on completion, commenced
actual use for industrial purpose, in the year 1999.

     2. The appellant was served with a demand notice dated
26.2.2002 by the Gar Kamgar Talathi, Chikhali, demanding
payment of Rs.45,25,538/- as non-agricultural cess ·and G
additional non-agriculture cess, for the period 1995-96 to 2001-
02. As the said payment was not made, default notices dated      .,
1.3.2002 and 5.3.2002 were issued under Section 174 of thel'-
Maharasthra Land Revenue Code, 1966 ('Code' for short)
informing that if the amount demanded was not paid within' H
                                                                   r
    874          SUPREME COURT REPORTS               [2011] 7 S.C.R.


A   seven days, the amount due will be recovered with 25% of the
    amount due as penalty. At that stage the appellant filed a writ
    petition before the Bombay High Court for quashing the demand
    notice 26.2.2002, 1.3.2002 and 5.3.2002. The ·appellant
    contended that it was a "government lessee". Alternatively, it
B   was_ contended that it was the tenant of the Development
    Authority. It was submitted that neither a government lessee nor
    a tenant of the Development Authority was liable to pay the non-
    agricultural assessment under the provisions of the Code.

          3. The High Court, by judgment dated 4.7.2007 rejected
C   the contention that appellant was a government lessee. It held
    that as lessee under the Development Authority, the appellant
    was liable to pay the non-agricultural assessment. The High
    Court however held that having regard to section 115 of the
    Code, non-agricultural assessment could be levied only with
D   effect from the date on which the land was actually used for non-
    agricultural purpose, and as appellant commenced actual non-
    ag ricu ltu ral use in the year 1999, the non-agricultural
    assessment was due by it only from 1999-2000. As a
    consequence, the High Court allowed the writ petition in part,
E   quashed the demand relating to the period 1995-96 to 1998-
    99 and upheld the claim for the non-agricultural assessment
    from the year 1999-2000 onwards. The said order is challenged
    in this appeal by special leave contending that it is not liable to
    pay the non-agricultural assessment as it is a government
F   lessee. Alternatively it is contended that being the tenant of the
    'occupant', it is liable to pay the land revenue, as only the
    'occupant' is liable to pay the land revenue under section 39 of
    the said Code. On the contentions raised, the following
    questions arise for consideration:
G
          (i)      Whether the petitioner is a 'government lessee' and
                   therefore not liable to pay the non-agricultural
                   assessment?

          (ii)     Whether the appellant beil")g a tenant of the
                   Development Authority, the demand for non-
   TATA MOTORS LTD. v. TALATHJ OF VILLAGE                 875
   CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]

           'agricultural assessment could be made only on the    A
            Development Authority and not against the tenant?

The relevant statutory provisions
    4. The answers to the aforesaid two questions would
depend upon the provisions of the Maharashtra Land Revenue       B
Code, 1966. Section 39 makes the occupant liable to pay the
land revenue and the said section is extracted below: ·

    "39. Occupant to pay land revenue and Government lessee
    to pay rent fixed.                                           C

    Every occupant shall pay as land revenue the assessment
    fixed under the provisions of this Code and rules made
    thereunder; and every Government lessee shall pay as
    land revenue lease money fixed under the terms of the        o.
    lease."

                                         (emphasis supplied)

The term "land revenue" and "occupant" referred in the said
section are defined in Section 2{19) and section 2(23) and the   E
said definitions are extracted below:

    "(19) - "land revenue" means all sums and payments, in
    money received or legally claimable by or on behalf of the
    State Government from any person on account of any land
    or interest in or right exercisable over land held by or     F
    vested in him, under whatever designation such sum may
    be payable and any cess or rate authorised by the State
    Government under the provisions of any law for the time
    being in force; and includes premium, rent, lease money,
    quit rent, judi payable by a inamdar or any other payment    G
    provided under any Act, rule, contract or deed on account
    of any ·1and;                       ·

    "(23) - "occupant" means a holder in actual possession
    of unalienated land, other than a tenant or Government       H .
                                                                  •
    876       SUPREME COURT REPORTS                    [2011) 7 S.C.R.


A         lessee ; provided that, where a holder in actual possession
          is a tenant, the land holder or the superior landlord, as the
          case may be, shall be deemed to be the occupant;

    The expressions "to hold land" or "to be a land holder or holder
    of land" is defined in section 2(12) and mean to be lawfully in
8
    possession of land, whether such possession is actual or not.

         The term "tenant" and "government lessee" referred in the
    definition of "occupant" are defined in Section 2(40) and
    Section 2(11) and they are extracted below:
c
          "(40) "tenant" means a lessee, whether holding under an
          instrument, or under an oral agreement, and includes a
          mortgagee of a tenant's rights with possession; but does
          not include a lessee holding directly under the State
0         Government;

          (11) "Government lessee" means a person holding land
          from Government under a lease as provided by section
          38".

E       Section 38 referred in the definition of 'Government
    Lessee' is extracted below :

          "It shall be lawful for the Collector at any time to lease under
          grant or contract any unalienated unoccupied land to any
          person, for such period, for such purpose and on such
F
          conditions as he may, subject to rules made by the State
          Government in this behalf, determine, and in any such case
          the land shall, whether a survey settlement has been
          extended to it or not, be held only for the period and for
          the purpose and subject to the conditions so determined.
G         The grantee shall be called a Government lessee in
          respect of the land so granted."

    Chapter XI of the Code deals with realization of land revenue
    and other revenue demands. Section 168 in Chapter XI of the
H
    TATA MOTORS LTD. v. TALATHI OF VILLAGE                     877
    CHIKHALI 'AND ORS. [R.V. RAVEENDRAN, J.]

Code dealing with the liability for land revenue is extracted          A
below:

    "168. Liability for land revenue.

     (1)   In the case of
                                                                       B
           (a) unalienated land, the occupant or the lessee of
           the State Government,

           (b) alienated land, the superior holder, and

           (c) land in the possession of a tenant, such tenant         C
           if he is liable to pay land revenue therefor under the
           relevant tenancy law, shall be primarily liable to the
           State Government for the payment of the land
           revenue, including all arrears of land revenue, due
           in respect of the land. Joint occupants and joint           D
           holders who are primarily liable under this section
           shall be jointly and severally liable.

    (2) In case of default by any person who is primarily liable
    under this section, the land revenue, including arrears as         E
    aforesaid, shall be recoverable from any person in
    possession of the land.

    Provided that, where such person is a tenant, the amount
    recoverable from him shall not exceed the demands ofAhe
    year in which the recovery is made.              ·'                F

    Provided further that, when land revenue is recovered
    under this section from any person who is not primarily
    liable for the same, such person shall be allowed credit for
    any payments which he may have duly made to the person             G
    who is primarily liable, and shall be entitled to credit, for
    the amount recovered from him, in account with the person
    who is primarily liable".

    5. It is not in dispute that the land in question is unalienated   H
    878     SUPREME COURT REPORTS                  [2011] 7 S.C.R.


A   land and that. in regard to such land, only the 'occupant' as
    defined in the Code is primarily liable to pay the non-
    agricultural assessment to the state government. Section 2(23)
    makes it clear that where the land is in the actual possession
    of a tenant, the superior landlord or the land holder is deemed
B   to be the occupant. It is also not in dispute that the
    Development Authority is the 'occupant' and the appellant is not
    the occupant, but only a tenant under the occupant.

    Re : Question Ci}

C       6. There is no dispute. that a government lessee is not
  liable to pay any land revenue. Section 2(11) read with section
  38 defines a 'government lessee' as a lessee under a lease
  granted by a Collector in regard to unalienated unoccupied
  land belonging to the government. In this case the lands in
D question for which the non-agricultural assessment h.as been
  demanded, were not leased by the Collector to the appellant,
  The lease deed states that the lands leased were held by the
  Development Authority, and the lessor is the Development
  Authority. Therefore the leased lands were not government
E lands and the lessor was not the government. There is also
  nothing to show tharthe lands belonged to government and that
  the Development Authority granted the lease in favour of
  appellant, acting as an agent of the state government. A lessee
  from the Development Authority is not a government lessee as
F the Development Authority is not the government and the lease
  lands are not government lands. Therefore the appellant cannot
  call itself a government lessee. The first contention is therefore
  rejected.

       7. Though the issue is thus simple and straightforward, the
G appellant however contended that it is a 'government lessee'
  in a rather round-about manne·r, relying upon a state
  government Circular dated 29.3.1975 which clarified that as on
  that date, MIDC was the agent of the state government and
  therefore not liable to pay any assessment to the government
H in respect of the lands held by it as agent of the state
    TATA MOTORS LTD. v. TALATHI OF VILLAGE                   879
    CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]

government; that any lessee under MIDC would therefore A
become a government lessee and will not be liable to pay the
non-agricultural assessment under the provision of Code, but
will only be liable to pay the lease money fixed under the lease;
and that consequently the industrial lessees, under MIDC, were
not required to pay any non-agricultural assessment in addition B ·
to the lease money. It is submitted by the appellant that in
regard to the adjoining land taken by it on lease from MIDC, it
is not required to pay the non-agricultural assessment on
account of appellant being treated as government lessee, under
the said Circular dated 29.3.1975. It is contended that in c
principle, there is no difference between the MIDC and· the
Development Authority and having regard to the provisions of
the Maharashtra Regional and Town Planning Act, 1966 (for
short 'MRTP Act'), the Development Authority should also be
treated as agent of the state government and consequently, the D
appellant should be treated as a government lessee which is
not liable to pay any non-agricultural assessment, in regard to
the lands taken on lease under deed dated 3.1.1995.

      8. The question whether the appellanfis liable to pay non-
agricultural assessment in regard to the land taken on lease         E
from the Development Authority will have to be decided with
reference to the relevant statutory provisions and the terms of
lease and not with reference to position prevailing with reference
to some other lease taken by the appellant from MIDC. The
status, objects, functions and area of operation of MIDC and         F
the Development Authority are different. Any decision or
clarification issued in regard to lands held by MIDC or lands
leased by MIDC will not apply to lands held or leased by the
Development Authority. As noticed above, the circular dated
29.3.1975 relied upon by the appellant is not relevant as it         G
applies only to lessees of MIDC, which as agent of the state
government granted certain leases and consequently such
lessees as government lessees were exempted from paying
the non-agricultural assessment. The said notification did not
refer to Pimpri-Chinchwad New Town Development Authority as          H
    880      SUPREME COURT REPORTS                  [2011] 7 S.C.R.


A   the agent of the state government in regard to grant of leases
    to appellant and others. In fact there is no document which
    shows the state government to be the owner of the lands leased
    by the Development Authority, nor any document to show that
    the state government had either constituted or recognized the
B   Development Authority as its agent in regard to leased lands.

       9. To know whether the Development Authority was an
  agent of the state government and to ascertain its status, it is
  necessary to refer to the relevant provisions of the Maharashtra
C Regional and Town Planning Act, 1966 (for short 'MRTP Act').
  Section 113 of MRTP Act provides for designation of new
  towns and constitution of Development Authorities for those
  new towns. Sub-sections (1), (2), and (4) of that section are
  extracted below:

D         "113. (1) If the State Government is satisfied that it is
          expedient in the public interest that any area should be
          developed as a site for a new town as reserved or
          designated in any draft or final Regional Plan it may by
          notification in the Official Gazette, designate that area as
E         the site for the proposed new town. The new town shall be
          known by the name specified in the notification.

          (2) After publication of the notification under sub-section
          (1) for the purpose of acquiring, developing and disposing
          of land in the area of a new town, the State Government
F         shall by another notification in the Official Gazette,
          constitute a New Town Development Authority ......... .

                )()()(                 )()()(            xxx
G         (4) Every Development Authority shall be a body corporate
          with perpetual succession and a common seal with power
          to acquire, hold and dispose of property, both moveable
          and immoveable, and contract and sue or be sued by such
          name as may be specified in the notification under sub-
H         Section (2)".
    TATA MOTORS LTD. v. TALATHI OF VILLAGE                881
    CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]

Section 114 lays down the object of Development Authority and · A
sub-section (1) thereof is extracted below:

    "114(1) The objects of a Development Authority shall be
    to secure the laying out and development of the new town
    in accordance with proposals approved ·in that behalf under   8
    the provisions of this Act, and for that purpose every such
    Authority shall subject to the provisions of section 113A
    have power to acquire, hold, manage and dispose of land
    and other property to carry out buildings and other
    operations, to provide water, electricity, gas, sewerage      C
    and other services, amenities and facilities and generally
    to do anything necessary or expedient for the purpose of
    the new town or for purposes incidental thereto."

Section 116 empowers Development Authorities to acquire
lands. Section 118 deals with disposal of lands by Development D
Authorities and sub-section (1) thereof which is relevant is·
extracted below:

    "118.(1) Subject to any directions given by the State
    Government under this Development Act, a Development          E
    Authority may dispose of any land acquired by it or vesting
    in it to such persons, in such manner, and subject to such
    terms or conditions as they consider expedient for
    securing the development of the new town in accordance
    with proposals approved by the State Government under         F
    this Act:

    Provided that, a Development Authority shall not have
    power, except with. the consent of the State Government,
    to sell any land Qr to grant a lease of any land for a term
    of more than ninety-nine years, and the State Government G
    shall not consent to any such disposal of land unless it is ·
    satisfied that there are exceptional circumstances which
    render the disposal of the land in that manner expedient."

    10. It is evident from section 113, 114 and 118 of MRTP       H
    882.       SUPREME COURT REPORTS                 [2011] 7 S.C.R.


A Act that the Development Authority is a body corporate which
  can acquire, hold, manage and dispose of land. Section 113
  provides for constitution of a New Town Development Authority.
  Section 114 states the objects of such Development Authority.
  Section 118 of MRTP Act provides for disposal by the
B Development Authority of any land acquired by it or vesting in
  it. The Development Authority is therefore a body corporate
  which can acquire, hold, possess, manage, develop and
  dispose of land in its name and on its own behalf. The fact that
  the Development Authority requires the consent of the state
c government to dispose of any of its land by way of leases in
  excess of 99 years will not alter the position that the lands
  leased are lands of the Development Authority. There is no
  provision in MRTP Act which requires the New Town
  Development Authority; to hold and dispose of any government
0 land  as agent of the state government. In contrast, MRTP Act
  contains a specific provision enabling the state government to
  require a corporation or compa'ly (other than a New Town
  Development Authority, which is specific to a new Town), to
  execute development work and dispose of its lands as its
E agent. Sub-section (3A) of section 113 of MRTP Act provides:

           "(3A). Having regard to the complexity and magnitude of
           the work involved in developing any area as a site for the
           new town, the time required for setting up new machinery
           for undertaking and completing such work of development,
F          and the comparative speed with which such work can be
           undertaken and completed in the public interest, if the work
           is done through the agency of a corporation including a
           company owned or controlled by tbe State or a subsidiary
           company thereof, set up with the object of developing an
G          area as a new town, the state government may,
           notwithstanding anything contained in sub-section (2),
           require the work of developing and disposing of land in the
           area of a new town to be done by any such corporation,
           company or subsidiary company aforesaid, as an agent
H          of the state government; and thereupon, such corporation
     TATA MOTORS LTD. v. TALATHI OF VILLAGE                     883
     CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]

      or company shall, in relation to such area, be declared by       A
      the state government, by notification in the official gazette,
   · ·to be the New Town Development Authority for that area."

 MIDC is a corporation which would fall under sub-section
 113(3A) whereas the Development Authority falls under section
                                                                       8
 113(2) of MRTP Act. The Circular issued with reference to
 MIDC is therefore of no assistance to contend that land leased
 by the Development Authority to appellant is a government land.
 The contention of appellant that the Development Authority is
 the agent of state government and that the appellant is a             C
 government lessee are therefore rejected.

 Re : Question (ii)

        11. The appellant next· contends that even if it is not a
  governmeht lessee, being a lessee of the 'occupant', it is not D
  liable· to paythe land revenue. There is no dispute that section .
 .39 of the Land Revenue. Code, fastens liability to pay land
. revenue upon the occupant and not on the tenant of the
. occupant. Section 168(1)(a) ofthe Code also reiterates that in
  the case of unalienated land, the occupantshall be primarily E
  liable to the state government for making the payment of land
  revenue including all arrears. Sub-section (2) of section 168
  provides that in case of default of the person primarily liable,
  the. land revenue shall be recoverable from any person in
  possession o.f the land. It is therefore contended by the
  appellant that the state government can make the demand for F
  any land revenue only upon the occupant, that is, the
  Development Authority in ·this case, which is primarily liable. It·
  is submitted that only if it defaults, the amount could be
  recovered from the person in possession, as provided under
  section 168(2) of the Code. It is submitted that the notice of G
  demand, directly issued to the appellant, should be quashed,
  as there is nothing to show that a demand was first issued to
  the Development Authority, that it defaulted in payment of the
  amount demanded, and that the impugned notices were issued·
  only thereafter, under section 168(2) of the Act. It is submitted H
    884      SUPREME COURT REPORTS                    [2011] 7 S.C.R.


A   that the liability to pay land revenue being that of the
    Development Authority, the demand notices issued to the
    lessee as if it is person primarily liable are liable to be quashed.
    It is further submitted that if and when the Development Authority
    pays the land revenue to the government, in turn, it would be
s   entitled to make a demand upon the appellant, if the lease
    permitted such a demand; and when such a demand is made,
    the appellant as lessee would deal with the demand in terms
    of the lease and if there is any dispute between the
    Development Authority and the appellant as lessor and lessee,
c   that will be settled in accordance with law.

         12. It is no doubt true that the primary liability to pay the
    land revenue which includes non-agricultural assessment is on
    the occupant, under Section 39 of the Code. The definition of
    'occupant' excludes not only 'government lessee' but also every
D   tenant. Whenever the person in actual possession of the land
    is the tenant, the land holder or the superior landlord who
    granted the lease to such tenant is deemed to be an occupant.
    In this case the appellant has taken the lease from the
    Development Authority and therefore the Development Authority
E   as the landlord and occupant, will be primarily liable to pay the
    land revenue. But the matter does not rest there ..

        13. In exercise of the powers conferred by Section 159 of
  the MRTP Act, the Development Authority, with the previous
F approval of the state government, has made regulations for
  regulating the disposal of land acquired by it or vesting in it in
  the Pimpri-Chinchwad New Town, known as the "Pimpri-
  Chinchwad New Town Development Authority (Disposal of
  Land) Regulations, 1973" ('Regulations' for short). Regulation
G 1(ii) provides that the said Regulations shall apply to the lands
  acquired by or vested in the Pimpri-Chinchwad New Town
  Development Authority for the development of Pimpri-
  Chinchwad New Town. Regulation 5 relates to disposal of land
  by lease. It provides that the Development Authority may from
  time to time dispose of plots of land on lease, to the persons
H
    TATA MOTORS LTD. v. TALATHI OF VILLAGE                   885
    CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]

eligible, in consideration of a premium and an annual ground         A
rent. Part IV of the Regulation contains the conditions of lease.
Regulations 10(iv) and 10(v) relating to the question of payment
of rates and taxes and land revenue and cesses are extracted
below:
                                                                     B
     "10(iv) The lessee shall during the continuance of the
     lease, pay all the rates, taxes, fees and other charges due
     and becoming due in respect of demised land by the
     Development Authority or lessee thereof.

     (v) The lessee shall during the continuance of the lease pay· C
     the land revenue cesses assessed or which may be
     assessed on the demised land".

      Regulation 16 provides that in the event of conflict between
the Regulations and provisions of a lease deed entered into          D
by the Development Authority, the provisions of the Regulations
will prevail. There is however no conflict between the
Regulations and the terms of the lease. Clause 2 (c) of the
lease deed dated 3.1.1995 between the Development Authority
as lessor and appellant as lessee, reiterates the terms and          E
conditions of lease contained in the Regulations by providing
that the lessee would be liable to pay any future rates or taxes
recoverable under law from the lessee. Thus there is a statutory
liability upon the appellant as lessee to pay the land revenue
(non-agricultural assessment) to the state government.
                                                                     F
     14. Section 39 of the Code makes the Development
Authority, as 'occupant', liable to pay the non-agricultural
assessment and the said liability is, in turn, statutorily passed
on to the appellant as lessee under the Regulations 10(iv) and
(v) and the clause 2(c) of the lease deed. This Court in Nagpur      G
Improvement Trust v. Nagpur Timber Merchants Association
- 1997 (5) SCC 105, recognized that the Improvement Trust or
Development Authority under the terms of lease, can pass on
the liability in regard to non-agricultural assessment to the
lessees.                                                             H
    886     SUPREME COURT REPORTS                 [2011) 7 S.C.R.


A       15. The only issue that remains for consideration is
  whether the demand for land revenue could be directly made
  against the lessee of the occupant, when the land revenue code
  makes the occupant primarily liable. But for the statutory
  obligation created under regulation 1O(iv) and (v) of the
B Regulations, in the normal course, a demand should have been
  made upon the occupant (landlord) who is primarily liable and
  only if the landlord fails to pay, recourse could be had to sub-
  section (2) of section 168 which enabled a claim being made
  against the tenant in terms of the said sub-section. But where
c the liability to pay land revenue is fastened on the lessee under
  the statutory regulations, it is not be necessary for the state
  government to make a claim upon the occupant, leading to a
  demand by the Development Authority, in turn, upon its lessee,
  for payment of land revenue. The state government can directly
0 make the demand as the lessee, by taking note of the liability
  statutorily fastened on the lessee under the Regulations. When
  the liability of the lessee to pay the land revenue is not open to
  challenge, having regard to the provisions of the Regulations
  and terms of the lease, no purpose would be served by requiring
E the state government to recover the amount from the
  Development Authority (occupant) and then require the
  Development Authority to make a demand upon the le~see to
  recover the amount. Having regard to the statutory liability
  created upon the lessee, under the Pimpri-Chinchwad New
  Town Development Authority (Disposal of land Regulations),
F 1973, the position of the lessee would be similar to a tenant
  referred to in sub-section 1(c) of section 168 of the Code which
  provides that in the case of the land in possession of a tenant,
  such tenant if he is liable to pay land revenue therefor under
  the relevant tenancy laws, shall be primarily liable to the state
G government for the payment of land revenue, including all
  arrears. The liability of the appellant as tenant, to pay the land
  revenue, though not under a 'tenancy law' in its strict sense, but
  is nevertheless under a statutory regulation governing the
  tenancy and therefore the demand by the state government
H directly against the appellant, can be justified by the principle
    TATA MOTORS LTD. v. TALATHI OF VILLAGE                    887
    CHIKHALI AND ORS. [RV. RAVEENDRAN, J.]

underlying section 168(1)(c). In the view we have taken, it is .not   A
necessary to consider the further submission that the term
'tenancy laws' used in section 168(1)(c) should be understood
in a broad sense, arid if so interpreted, would include any law
regulating or governing tenancies, and as ,the Regulations
govern tenancies by the Development Authority, the Regulations        B
will fall within the term 'tenancy laws' and consequently the
primary liability to pay land revenue would be upon the appellant
under section 168(1)(c). Be that as it may.

      16. However, as we have held that a demand can directly
be made upon the lessee, the lessee can give a representation         C
or file objections before the revenue authorities of the state
government, if it has any grievance in regard to the
determination of the quantum of the non-agricultural assessment
or the demand therefor.
                                                                      D
     17. Sub-section (2) of section· 168 no doubt provides that
in case of default by any person who is primarily liable under
sub-section (1), the land revenue including arrears shall be
recoverable from any person in possession of the land provided
that where such person is a tenant the amount recoverable frorn E
him shall not exceed the demands of the year in which the
recovery is made. This sub-section no doubt implies the
demand should be made upon the occupant and only if the
occupant defaults, a demand can be made upon the person in
occupation, that is the lessee. We are of the view that sub- F
section (2) of section 168 will operate where the tenant is not
primarily liable under section 168(1) of the Code, or where
there is no statutory liability upon the lessee to bear and pay
the land revenue. The procedure under sub-section (2) would
apply where the liability to pay the land revenue is on the lessor, G
and where the lessee is not liable therefor orwhere the liability
of the lessee to pay the land revenue is merely contractual, as
contrasted from a statutory obligation. Where the liability of the
lessee is a statutory liability, we see no reason why that
recovery should be delayed and protracted by requiring a
                                                                      H
    888      SUPREME COURT REPORTS                  (2011] 7 S.C.R.


A   demand by the state government on the lessor and a
    consequential demand by the lessor on the lessee. We may
    further note, if the lessee commits default in paying the land
    revenue, it may amount to a breach leading to re-entry under
    clause (4) of the lease deed. Be that as it may. However, having
B   regard to the pendency of these proceedings, if the payment
    of the land revenue dues is made within four months from today
    it shall not be treated as a default or breach of the terms of the
    lease deed for the purpose of re-entry.

C      18. In view of the above, we find no error in the order of
  the High Court. Consequently this appeal is dismissed reserving
  liberty however to the appellant to file representations/
  objections before the concerned Revenue Authority, if it has any
  objection or grievance in regard to the quantum of non-
  agricultural assessment claimed in regard to the property
D leased to it. As the appellant had the benefit of interim stay
  against recovery, the appellant shall be liable to pay interest
  on the arrears/dues at the rate of 9% per annum from
  26.2.2002.

E D.G.                                           Appeal dismissed.