{"id":247072,"date":"1997-03-18T00:00:00","date_gmt":"1997-03-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/nagpur-improvement-trust-vs-nagpur-timber-merchants-on-18-march-1997"},"modified":"2016-07-09T21:23:15","modified_gmt":"2016-07-09T15:53:15","slug":"nagpur-improvement-trust-vs-nagpur-timber-merchants-on-18-march-1997","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/nagpur-improvement-trust-vs-nagpur-timber-merchants-on-18-march-1997","title":{"rendered":"Nagpur Improvement Trust vs Nagpur Timber Merchants &#8230; on 18 March, 1997"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Nagpur Improvement Trust vs Nagpur Timber Merchants &#8230; on 18 March, 1997<\/div>\n<div class=\"doc_author\">Author: S Agrawal<\/div>\n<div class=\"doc_bench\">Bench: S.C. Agrawal, S. Saghir Ahmad<\/div>\n<pre>           PETITIONER:\nNAGPUR IMPROVEMENT TRUST\n\n\tVs.\n\nRESPONDENT:\nNAGPUR TIMBER MERCHANTS ASSOCIATION &amp; ANR.\n\nDATE OF JUDGMENT:\t18\/03\/1997\n\nBENCH:\nS.C. AGRAWAL, S. SAGHIR AHMAD\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n<p>\t    [WITH CIVIL APPEAL NO. .2036 OF 1997<br \/>\n     (arising out of S.L.P. (Civil) No. 5594 of 1993)]<br \/>\n\t\t      J U D G M E N T<br \/>\nS.C. AGRAWAL, J.\n<\/p>\n<p>     Special leave granted.\n<\/p>\n<p>     These appeals raise common questions for consideration.<br \/>\nThe Nagpur Improvement Trust, the appellant herein, has been<br \/>\nconstituted under  the provisions  of the Nagpur Improvement<br \/>\nTrust Act,  1936 enacted  to  provide  for  improvement\t and<br \/>\nexpansion  of  the  town  of  Nagpur.  The  said  Act  makes<br \/>\nprovisions for\tacquisition of land by the Improvement Trust<br \/>\nin connection  with various  schemes which are framed by the<br \/>\nImprovement Trust. After development the land is disposed of<br \/>\nby the\tImprovement Trust.  The disposal  of lands vested in<br \/>\nthe Improvement\t Trust is governed by the Nagpur Improvement<br \/>\nTrust (Land  Disposal) Rules,  1955 (hereinafter referred to<br \/>\nas &#8216;the Rules&#8217;) made by the State Government, in exercise of<br \/>\npowers conferred  by Section  76 read with Section 89 of the<br \/>\nNagpur Improvement  Trust Act,\t1936. Rule  3  provides\t for<br \/>\ntransfer  of   land  of\t Improvement  Trust  by\t (a)  direct<br \/>\nnegotiation with  party; (b)  public  action;  (c)  inviting<br \/>\ntenders; and  (d) concessional rates. Rule 4 prescribes that<br \/>\nthe land  shall be  disposed of\t at a premium to be fixed in<br \/>\naccordance  with   the\tprovisions   contained\ttherein.  In<br \/>\naddition to the amount of premium, the annually. Rule 7 lays<br \/>\ndown that  every  transfer  of\tImprovement  Trust.  If\t the<br \/>\npurchaser  by\tan  application\t  in  writing  requests\t the<br \/>\nImprovement Trust to convert the period of lease from thirty<br \/>\nyears to  ninety nine years, the Improvement Trust may do so<br \/>\nafter charging\tin addition  15% of  the premium  fixed\t for<br \/>\nthirty years of lease with proportionate increase in annual<br \/>\nground\trent.\tIn  certain   specified\t circumstances\t the<br \/>\nImprovement Trust  can dispose\tof land\t by outright sale or<br \/>\nexchange. Rule\t9 of  the Rules,  which is  relevant for the<br \/>\npurpose of this case, reads as under :-\n<\/p>\n<blockquote><p>     &#8220;Rule  9.\tWhere  land  revenue  is<br \/>\n     payable in\t respect of  any plot so<br \/>\n     transferred such land revenue shall<br \/>\n     be payable by the Trust.&#8221;<\/p><\/blockquote>\n<p>     The other\tprovisions of  the Rules  have no bearing on<br \/>\nthe matter in issue.\n<\/p>\n<p>     The respondents in these appeals are lessees in respect<br \/>\nof lands  of the Improvement Trust. Under the terms of Lease<br \/>\nDeed they are liable to pay the amount prescribed therein as<br \/>\npremium and  ground rent  periodically. Clause\t1(b) of\t the<br \/>\nLease Deed contains the following provision :-\n<\/p>\n<blockquote><p>     &#8220;(b) The  lessee shall from time to<br \/>\n     time and  at all  times during  the<br \/>\n     said term\tpay  and  discharge  all<br \/>\n     rates,    taxes\t charges     and<br \/>\n     assessments of every description or<br \/>\n     imposed upon  the said  land hereby<br \/>\n     demised  or  the  building\t erected<br \/>\n     thereupon or  upon the  landlord or<br \/>\n     tenant in respect thereof.&#8221;<\/p><\/blockquote>\n<p>     In\t 1978\tthe  Government\t  of  Maharashtra  initiated<br \/>\nproceedings for\t assessment and recovery of non-agricultural<br \/>\nassessment charges  under the  provisions of the Maharashtra<br \/>\nLand Revenue  Code, 1996  (hereinafter referred\t to as\t&#8216;the<br \/>\nLand Revenue  Code&#8217;). Non-agricultural assessment charges in<br \/>\nrespect\t of  the  plots\t which\thad  been  allotted  by\t the<br \/>\nImprovement Trust to the respondent-lessees were demanded by<br \/>\nthe  State   Government\t from  the  Improvement\t Trust.\t The<br \/>\nImprovement Trust,  as per  clause 1(b)\t of the\t Lease\tDeed<br \/>\nasked  the   lessees  to   the\tmake  payment  of  the\tnon-<br \/>\nagricultural assessment\t charges in  respect of their lands.<br \/>\nThe respondents\t and filed Writ Petitions in the Bombay High<br \/>\nCourt Nagpur  Bench, challenging  the said  demand  of\tnon-<br \/>\nagricultural assessment\t from them. The Writ Petitions which<br \/>\nhave given  rise to  Special Leave  Petitions  (Civil)\tNos.<br \/>\n11018-23 of  1992 were\tdisposed of  by the  High Court by a<br \/>\ncommon judgment\t dated September  3, 1991  whereby the\tHigh<br \/>\nCourt has  allowed the\tsaid Writ  Petitions and has quashed<br \/>\nthe recovery notices issued by the Improvement Trust and has<br \/>\nrestrained the\tImprovement Trust  from making\trecovery  of<br \/>\nnon-agricultural assessment  from the plot holders, like the<br \/>\nrespondents or\ttheir members.\tThe High Court has held that<br \/>\nnon-agricultural assessment  is nothing but land revenue and<br \/>\nin view\t of Rule  9 of\tthe Rules  the Improvement  Trust is<br \/>\nliable to  pay the same and it could not recover it from the<br \/>\nlessees. The High Court has further held that clause 1(b) of<br \/>\nthe Lease  Deed does  not include payment of land revenue by<br \/>\nthe  lessees   of  plots  held\tby  them  and  that  such  a<br \/>\nconstruction of\t the said clause would be in consonance with<br \/>\nRule 9\tof  the\t Rules\tand  that  if  the  said  clause  is<br \/>\ninterpreted to\tinclude even  land  revenue  then  the\tsaid<br \/>\nclause would  be against Rule 9 which provides that the land<br \/>\nrevenue of  the plot  transferred to  the  lessees  is\tmade<br \/>\npayable by  the Improvement  Trust and\tno one else and that<br \/>\nthe burden  that is  statutoril fixed under Rule 9 cannot be<br \/>\nshifted to others as is sought to be done by the Improvement<br \/>\nTrust. The  High Court\thas also  observed  that  since\t the<br \/>\nrespondents or their member had no notice about the fixation<br \/>\nor assessment beir undertaken, they could not participate in<br \/>\nthose proceeding  and that  the Improvement  Trust failed to<br \/>\nget proper  fixated done  because it took no interest in the<br \/>\nproceedings and\t the in\t these\tcircumstances  no  liability<br \/>\ncould be fastened up the lessees.\n<\/p>\n<p>     Writ Petition No. 2351 of 1982, which has given rise to<br \/>\nSpecial\t Leave\tPetition  (Civil)  No.\t5594  of  1993,\t was<br \/>\ndisposed  of  by  the  High  Court  by\tits  judgment  dated<br \/>\nSeptember 6, 1991 on the basis of the earlier judgment dated<br \/>\nSeptember 3, 1991 referred to above.\n<\/p>\n<p>     Shri V.A.\tBobde, the  learned senior counsel appearing<br \/>\nfor the Improvement Trust, has urged that the High Court was<br \/>\nin error in holding that non-agricultural assessment is land<br \/>\nrevenue Trust  alone which  is bound to pay the said charges<br \/>\nand it\tcannot require\tthe lessees  to pay  the same.\tShri<br \/>\nBobde has  also placed\treliance on clause 1(b) of the Lease<br \/>\nDeed  and  has\tsubmitted  that\t the  Improvement  Trust  is<br \/>\nentitled to  require the lessees to pay the non-agricultural<br \/>\nassessment that\t is being  recovered by the State Government<br \/>\nfrom the  Improvement Trust  and that  the High Court was in<br \/>\nerror in  holding that in view of Rule 9, clause 1(b) of the<br \/>\nLease Deed cannot be construed to impose such a liability on<br \/>\nthe lessees.\n<\/p>\n<p>     The learned counsel appearing for the respondents have,<br \/>\non the\tother hand,  urged that\t the High  Court has rightly<br \/>\nconstrued the  expression &#8220;land\t revenue&#8221; in  Rule 9  of the<br \/>\nRules to  include non-agricultural  assessment and  that  in<br \/>\nview of\t the mandate  in Rule 9, the Improvement Trust alone<br \/>\nis liable  to pay  non-agricultural assessment and it cannot<br \/>\npass on\t the liability\tfor the\t same to  the  lessees.\t The<br \/>\nsubmissions. of\t the learned  counsel is that clause 1(b) of<br \/>\nthe  Lease   Deed  cannot  be  construed  as  entitling\t the<br \/>\nImprovement Trust  to require  the lessees  to pay  the non-<br \/>\nagricultural assessment\t and that,  if\tclause\t1(b)  is  so<br \/>\nconstrued, it  would be\t inconsistent  with  the  provisions<br \/>\ncontained in Rule 9 of the Rules.\n<\/p>\n<p>     We will  first examine  the question  whether Rule 9 of<br \/>\nthe Rules  precludes the  Improvement Trust  to require\t the<br \/>\nrespondent-lessees to pay the amounts sought to be recovered<br \/>\nfrom the  improvement Trust  by the State Government as non-<br \/>\nagricultural assessment\t in respect  of the plots leased out<br \/>\nto the\trespondents. For  purpose, we  will proceed  on\t the<br \/>\nbasis that  the expression &#8220;land revenue&#8221; in Rule 9 includes<br \/>\nnon-agricultural assessment.  A perusal of Rule 9 shows that<br \/>\nit governs the relationship between the State Government and<br \/>\nthe Improvement\t Trust in  the matter  of recovery  of\tland<br \/>\nrevenue payable\t in respect  of lands  disposed of under the<br \/>\nRules. The  said Rule  imposes the liability for the payment<br \/>\nof land\t revenue in  respect of\t the lands disposed of under<br \/>\nthe Rules  on the  Improvement Trust. As a result, the State<br \/>\nGovernment can\trecover the  land revenue payable in respect<br \/>\nof the\tlands so  disposed of from the Improvement Trust and<br \/>\nit need\t not take  proceedings for  recovery  of  such\tland<br \/>\nrevenue from  the transferees of the lands that are disposed<br \/>\nof under  the  Rules.  But  that  does\tnot  mean  that\t the<br \/>\nImprovement Trust  cannot  pass\t on  its  liability  to\t the<br \/>\nlessees in  respect of the land revenue payable by it to the<br \/>\nState Government  in respect  of the  lands that  have\tbeen<br \/>\ntransferred to\tthe lessees.  The High\tCourt has  construed<br \/>\nRule 9 to mean that the land revenue in respect of the plots<br \/>\ntransferred to the lessees has to be paid by the Improvement<br \/>\nTrust and  no one  else and  that the  said burden  which is<br \/>\nstatutorily fixed  under Rule 9 cannot be shifted to others.<br \/>\nWe find\t no warrant  for adding\t the words  &#8220;no one else&#8221; in<br \/>\nRule  9\t so  as\t to  preclude  the  Improvement\t Trust\tfrom<br \/>\nrequiring the  lessees to  pay the  land revenue  which\t the<br \/>\nImprovement Trust is required to pay to the State Government<br \/>\nin respect  of the  lands that\thave been transferred to the<br \/>\nlessees. Under Section 114 of the Land Revenue Code the rate<br \/>\nof non-agricultural  assessment in respect of lands in urban<br \/>\nareas is  one-half the standard rate if the land is used for<br \/>\nthe purpose  of industry  and it is thrice the standard rate<br \/>\nin other urban areas if the land is used for the purposes of<br \/>\ncommerce. The  possibility cannot be excluded that amount of<br \/>\nthe non-agricultural  assessment payable  in respect  of the<br \/>\nplot of\t land disposed\tof by  the Improvement Trust may, in<br \/>\nthe course of time, exceed the amount of the premium that is<br \/>\npaid by the lessee at the time of grant of lease and, if the<br \/>\nImprovement Trust is precluded from recovering the amount of<br \/>\nnon-agricultural assessment  from the  lessee, it may end up<br \/>\npaying more  by way  of non-agricultural assessment than the<br \/>\namount received\t by it\tas premium  for the  land. By way of<br \/>\nillustration we\t may refer  to the  Lease Deed dated October<br \/>\n15, 1956  (Annexure &#8216;H&#8217; to the S.L.P.) executed in favour of<br \/>\nArya Pratinidhi\t Sabha (petitioner in Writ Petition No. 2265<br \/>\nof 1982\t before the  High Court). The amount of premium paid<br \/>\nby the lessee was Rs. 6,534\/- in respect of a plot measuring<br \/>\n7,286 square  feet and\tthe ground  rent is Rs. 10 per year.<br \/>\nThe letter of demand dated May 29, 1982 (Annexure &#8216;I&#8217; to the<br \/>\nS.L.P.) shows  that the\t non-agricultural assessment payable<br \/>\nin respect of the said plot @ Rs. 270.70 for the period from<br \/>\n1956 to\t 1982 was Rs. 7038\/-. The amount of non-agricultural<br \/>\nassessment payable  for the plot for the period from 1956 to<br \/>\n1982 thus  exceeds the\tpremium that  was  received  by\t the<br \/>\nImprovement Trust  from the  lessee. Surely  it could not be<br \/>\nthe intention  of the  rule making  authority in Rule 9 that<br \/>\nthe Improvement\t Trust shall  finance the lessees in respect<br \/>\nof lands  that are  disposed by\t the Improvement Trust under<br \/>\nthe Rules.\n<\/p>\n<p>     The High  Court has  also referred to the provisions of<br \/>\nRule 11\t of the\t Land Disposal\tRules, 1983  wherein  it  is<br \/>\nexpressly stated  that the  lessee during the continuance of<br \/>\nthe  lease   shall  pay\t  land\t revenue,   non-agricultural<br \/>\nassessment and\tcesses assessed\t or which may be assessed on<br \/>\nthe demised  land. The\tfact that  under Rule 11 of the Land<br \/>\nDisposal Rules,\t 1983 it  is  expressly\t provided  that\t the<br \/>\nlessee\tis  liable  to\tpay  land  revenue  non-agricultural<br \/>\nassessment in respect of land held by him does not mean that<br \/>\nin the\tabsence of  such an  express provision Rule 9 of the<br \/>\nRules must  be construed  to mean  that the  lessee  is\t not<br \/>\nliable\tto  pay\t land  revenue\tnon-agricultural  assessment<br \/>\nassessed on  the demised  land. As indicated earlier, we are<br \/>\nof the opinion that Rule 9 of the Rules did not preclude the<br \/>\nImprovement  Trust  from  recovering  from  the\t respondent-<br \/>\nlessees the amount of non-agricultural assessment payable by<br \/>\nit to the State Government in respect of lands leased out to<br \/>\nrespondent-lessees. Since  we have  held that  Rule 9 of the<br \/>\nRules did  not preclude the Improvement Trust from requiring<br \/>\nthe respondent-lessees to pay in respect of the lands leased<br \/>\nout  to\t  them\t non-agricultural   assessment\t which\t the<br \/>\nImprovement  Trust   was  required   to\t pay  to  the  State<br \/>\nGovernment, we do not consider it necessary to deal with the<br \/>\nquestion whether  the expression  &#8220;land revenue&#8221;  in Rule  9<br \/>\nincludes &#8220;non-agricultural assessment&#8221;.\n<\/p>\n<p>     The High Court has observed that liability could not be<br \/>\npassed on  to the  lessees because they had no notice of the<br \/>\nproceedings  regarding\t fixation  or\tassessment  of\tnon-<br \/>\nagricultural assessment\t and they  could not  participate in<br \/>\nthe proceedings.  It is\t no doubt  true that at the stage of<br \/>\nassessment of  amount of  non-agricultural assessment notice<br \/>\nhad only  been issued  to  the\tImprovement  Trust  and\t the<br \/>\nlessees had  no notice\tof the\tproceedings and\t they had no<br \/>\nopportunity of\tplacing\t their\tcase  before  the  concerned<br \/>\nauthorities. The grievance of the respondents in this regard<br \/>\nwould be  redressed if\tthey are  afforded an opportunity of<br \/>\nmaking their  representations against  determination of non-<br \/>\nagricultural assessment\t in respect  of plots  leased out to<br \/>\nthem and,  in case  such representations  are  made  by\t the<br \/>\nlessees,  the  same  are  given\t due  consideration  by\t the<br \/>\nconcerned authority.\n<\/p>\n<p>     In the  result, the  appeals are  allowed. The impugned<br \/>\njudgments of  the High\tCourt are  set aside  and  the\tWrit<br \/>\nPetitions filed\t by the\t respondents in\t the High  Court are<br \/>\ndisposed of  with the  direction that  it is permissible for<br \/>\nthe Improvement\t Trust to  require the respondent-lessees to<br \/>\npay the\t amount of non-agricultural assessment in respect of<br \/>\nthe lands  leased out to them. It would, however, be open to<br \/>\nthe respondents\t to  submit  their  representations  to\t the<br \/>\nconcerned  authority   against\tthe  determination  of\tnon-<br \/>\nagricultural assessment\t in respect  of lands  leased out to<br \/>\nthem and, if such representation is made within one month of<br \/>\nthis judgment,\tthe same shall be given due consideration by<br \/>\nthe concerned  authority and it should be disposed of within<br \/>\na period  of two  months from  the date of submission of the<br \/>\nrepresentation. The  recovery of non-agricultural assessment<br \/>\nshall not  be made from the respondent-lessee\/lessees making<br \/>\nthe representation till the representation is disposed of by<br \/>\nthe concerned authority. No order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Nagpur Improvement Trust vs Nagpur Timber Merchants &#8230; on 18 March, 1997 Author: S Agrawal Bench: S.C. Agrawal, S. Saghir Ahmad PETITIONER: NAGPUR IMPROVEMENT TRUST Vs. RESPONDENT: NAGPUR TIMBER MERCHANTS ASSOCIATION &amp; ANR. DATE OF JUDGMENT: 18\/03\/1997 BENCH: S.C. AGRAWAL, S. SAGHIR AHMAD ACT: HEADNOTE: JUDGMENT: [WITH CIVIL APPEAL NO. .2036 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-247072","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Nagpur Improvement Trust vs Nagpur Timber Merchants ... on 18 March, 1997 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/nagpur-improvement-trust-vs-nagpur-timber-merchants-on-18-march-1997\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nagpur Improvement Trust vs Nagpur Timber Merchants ... on 18 March, 1997 - Free Judgements of Supreme Court &amp; 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