2019 (8) TMI 864 - SC - Indian Laws

Maintainability of suit - Jurisdiction - civil suit filed before the High Court of Delhi - demand for payment of property tax - Whether a civil suit is maintainable in disputes pertaining to payment of tax under the Delhi Municipal Corporation Act, 1957? HELD THAT - Section 9 of the Code of Civil Procedure, 1908 confers jurisdiction on the Civil Courts to try all suits, excepting those which are either expressly or impliedly barred. Chapter VIII of the Act deals with levy of taxes that can be imposed by the Corporation. Property tax is dealt with in Sections 114 to Section 135 of the Act - There is an inherent right to approach a civil court. The bar on a civil court s jurisdiction is not to be readily or lightly inferred. The jurisdiction of civil courts can be excluded by an express provision of law or a clear intendment in such law. Section 17 of the Madhya Bharat Sales Tax Act, 1950 barred the jurisdiction of any court in matters pertaining to assessments made under the Act. The recovery of Sales Tax under the said Act was the subject matter of civil suits filed by the asessees. The State objected to the maintainability of the civil suits on the ground that jurisdiction of civil court was barred - A perusal of the relevant provisions of the Act would show that there is no express bar on the jurisdiction of Courts. However, Section 169 of the Act provides for an appeal to the Municipal Taxation Tribunal. Section 171 of the Act provides that the order of the Municipal Taxation Tribunal in the appeal filed by the Assessee shall be final. According to the Corporation, the aforementioned Sections, read together, create a bar on the jurisdiction of civil courts. Resolving the dispute about the maintainability of a civil suit against the order passed by the revisional authority, this Court held that the suit was not maintainable. In the said case, the submission on behalf of the Assessee was that the right to second appeal to the District Court as per the provisions of the Act was coupled with an onerous condition i.e. deposit of the entire amount of property tax. Hence, it was pleaded that the remedy provided under the Act was not adequate. This Court rejected the said submission by holding that the alternate remedy provided by a statute not being an adequate or efficacious remedy, is not a ground for maintaining a civil suit. However, this Court was of the opinion that a Writ Petition under Article 226 is maintainable if the remedy provided in the statute is not efficacious. There is also no pleading with regard to non-compliance of any fundamental provisions of the statute. It is settled law that jurisdiction of the civil courts cannot be completely taken away in spite of either an express or implied bar. The civil courts shall have jurisdiction to examine a matter in which there is an allegation of non-compliance of the provisions of the statute or any of the fundamental principles of judicial procedure. A plain reading of the plaint would suggest that the order impugned in the suit is at the most an erroneous order. No jurisdictional error is pleaded in the plaint - the question of maintainability of the suit does not arise. In the absence of any pleadings in the plaint, the High Court ought not to have remanded the matter back to the learned Single Judge - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Maintainability of the civil suit challenging the assessment order and demand for property tax.
2. Jurisdiction of civil courts in tax-related disputes under the Delhi Municipal Corporation Act, 1957.
3. Adequacy and effectiveness of the remedy provided under the statute.

Issue-Wise Detailed Analysis:

1. Maintainability of the Civil Suit:
The primary issue in this case was whether a civil suit challenging the assessment order dated 01.03.2013 and the demand for property tax was maintainable. The learned Single Judge of the Delhi High Court rejected the plaint, holding that the suit was not maintainable, relying on the judgment in NDMC v. Satish Chand (2003) 10 SCC 38. However, the Division Bench disapproved of this approach, noting that the learned Single Judge overlooked the distinction between an express bar of a civil suit and an onerous statutory remedy. The Division Bench remanded the matter back for fresh consideration, directing the learned Single Judge to examine the facts in light of their observations and the law laid down by the Supreme Court.

2. Jurisdiction of Civil Courts in Tax-Related Disputes:
The Supreme Court analyzed whether civil courts have jurisdiction in disputes pertaining to the payment of tax under the Delhi Municipal Corporation Act, 1957. Section 9 of the Code of Civil Procedure, 1908 (CPC) confers jurisdiction on civil courts to try all suits except those expressly or impliedly barred. The Court noted that while there is no express bar on the jurisdiction of civil courts in the Act, Section 169 provides for an appeal to the Municipal Taxation Tribunal, and Section 171 states that the Tribunal's order is final. The Court emphasized that the jurisdiction of civil courts can be excluded by an express provision of law or clear intendment, citing Wolverhampton New Waterworks Co. v. Hawkesford [1859] 6 C. B. (NS) 336 and Secretary of State v. Mask AIR 1940 PC 105.

3. Adequacy and Effectiveness of the Statutory Remedy:
The Court examined whether the remedy provided under the statute was adequate and effective. It referred to the principles laid down in Dhulabhai and Ors. v. The State of Madhya Pradesh and Anr. 1968 (3) SCR 662, which outline when the jurisdiction of civil courts is excluded. The Court found that the Delhi Municipal Corporation Act creates a liability for payment of tax and provides a remedy by way of an appeal to the Municipal Taxation Tribunal. The Court disagreed with the High Court's view that the statutory remedy was onerous due to the pre-condition of depositing the entire amount in dispute, citing Srikant K. Jituri v. Corporation of the City of Belgaum (1994) 6 SCC 572, which held that an alternate remedy provided by statute being onerous is not a ground for maintaining a civil suit.

Conclusion:
The Supreme Court concluded that the civil court's jurisdiction is impliedly barred for the following reasons:
(i) The liability for tax is created by the Act, and the remedy by way of an appeal to the Tribunal is provided by the same statute.
(ii) Section 171 gives finality to the Tribunal's orders, indicating the legislature's intent to exclude civil court jurisdiction.
(iii) The remedy provided by Section 169 is adequate and effective.

The Court found no allegations in the plaint regarding the violation of statutory provisions or non-compliance with fundamental principles of judicial procedure. Therefore, the civil suit was not maintainable. The judgment of the Division Bench of the High Court was set aside, and the appeals were allowed.