Reportable  

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal Nos.6377-6378 of 2019 (Arising out of SLP (C) Nos. 24282-24283 of 2016)

South Delhi Municipal Corporation & Anr. .... Appellant(s)

Versus

M/s Today Homes and Infrastructure Pvt. Ltd. Etc.   …. Respondent (s)

J U D G M E N T

L. NAGESWARA RAO, J.

Leave granted.  

1. The order of assessment dated 01.03.2013 and the

demand  for  payment  of  property  tax  made  on  the

Respondents was the subject matter of challenge in a civil

suit filed before the High Court of Delhi.   Learned Single

Judge of the Delhi High Court rejected the plaint by holding

that the suit was not maintainable.  The appeals filed by

the Respondents were allowed by a Division Bench.  The

judgment in the said civil suit was consequently set aside

and the learned Single Judge was directed to decide the

1

point of jurisdiction afresh on the basis of legal principles

laid  down  in  the  judgment  of  the  Division  Bench.

Aggrieved thereby,  the  South Delhi  Municipal  Corporation

(hereinafter, ‘the SDMC’) has filed this appeal.   

2. M/s GPS Properties Pvt. Ltd. was the highest bidder in

the  auction  of  commercial  plot  Nos.4,  5  and  6  of  Shivaji

Complex,  District  Centre,  Raja  Garden,  New  Delhi.  Said

property was allotted by the Slum & J. J. Department of the

Municipal Corporation of Delhi in favour of M/s GPS Properties

Pvt.  Ltd.  Approval  for  construction  of  a  mall/commercial

complex  was granted by the Delhi  Development  Authority

(hereinafter, ‘the DDA’).  M/s GPS Properties entered into a

development  agreement  with  M/s  Today  Homes  and

Infrastructure  Pvt.  Ltd.  for  construction  of  a

mall/commercial  complex  and  for  sale  of  units  therein.

Occupancy  certificate/completion  certificate  was  granted

by the DDA vide its letter dated 25.07.2008.  The property

was assessed  for  payment  of  taxes  and a  demand was

raised  pursuant  to  the  assessment  order.    The

Respondents  approached the  Municipal  Taxation  Tribunal

(hereinafter,  ‘the  Tribunal’)  by  filing  an  appeal  under

Section 169 of the Delhi Municipal Corporation Act, 1957 2

(hereinafter  ‘the Act’),  which  was  later  withdrawn.

Thereafter, a civil suit was filed in the High Court of Delhi

challenging the assessment order dated 01.03.2013 and

the  warrants  of  attachment.   The  Appellant  raised  a

preliminary objection regarding the maintainability of the

suit which was accepted by the learned Single Judge, who

placed strong reliance on the judgment  of  this  Court  in

NDMC v. Satish Chand1 to hold that the civil suit was not

maintainable.   

3. The  approach  of  the  learned  Single  Judge  was

disapproved by the Division Bench.   The Division Bench

held  that  the  learned  Single  Judge  overlooked  the

distinction between an express bar of a civil suit and where

there  is  no  express  bar  but  the  remedy  provided  is

onerous.  The High Court further observed that the learned

Single Judge failed to take into account the relevant factors

to  determine  the  maintainability  of  the  civil  suit.

According to the Division Bench, the learned Single Judge

had neither examined whether the remedy provided by the

Statute was onerous nor determined whether the limited

window for filing a civil suit, in spite of a bar, was available 1 (2003) 10 SCC 38

3

to  the Respondents.   The  Division  Bench remanded the

matter back for fresh consideration by the learned Single

Judge who was directed to examine the facts of the case in

the light of the observations made by the Division Bench

and the law laid down by this Court.  

4. Whether  a  civil  suit  is  maintainable  in  disputes

pertaining  to  payment  of  tax  under  the  Delhi  Municipal

Corporation Act, 1957 is the question that arises for our

consideration in these appeals.   

5. Section  9  of  the  Code  of  Civil  Procedure,  1908

(hereinafter  ‘the CPC’)  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. Sections 169 to 171 which relate to appeals that

may be filed against orders of assessment are as follows:

169. Appeal against assessment, etc.  (1)  An  appeal  against  the  levy  or  assessment  or revision of assessment of any tax under this Act shall lie to the Municipal Taxation Tribunal constituted under this Section:

4

Provided that the full amount of the property tax shall be paid before filing any appeal: Provided further that the Municipal  Taxation Tribunal

may, with the approval of the District Judge of Delhi, also take up any case for  which  any appeal  may be pending before the Court of such District Judge: Provided  also  that  any  appeal  pending  before  the

Court of such District Judge shall be transferred to the Municipal Taxation Tribunal for disposal, if requested by the applicant for the settlement thereof on the basis of annual value.    (2)  (a)  the  Government  shall  constitute  a  Municipal Taxation Tribunal consisting of a Chairperson and such other members as the government may determine: Provided  that  on  the  recommendation  of  the

government,  the  Chairperson  may  constitute  one  or more  separate  Benches,  each  Bench  comprising  two members,  one  of  whom  shall  be  a  member  of  the Higher Judicial Service of a State or a Union Territory and the other member from the Higher Administrative Service,  and  may  transfer  to  any  such  Bench  any appeal for disposal  or may withdraw from any Bench any appeal before it is finally disposed of. (b) The Chairperson, and not less than half of the other members, of the Municipal Taxation Tribunal shall be persons who are or have been the members of the Higher Judicial Service of a State or a Union Territory for a period of not less than five years, and the remaining members,  if  any,  shall  have  such  qualifications  and experience as the Government may by rules determine. (c)   The  Chairperson  and  the  other  members  of  the Municipal  Taxation Tribunal  shall  be appointed by the

5

government for a period of five years or till they attain the age of 65 years, whichever is earlier.  (d)  The  other  terms and conditions  of  service  of  the Chairperson and the other members  of  the Municipal Taxation  Tribunal,  including  salaries  and  allowances, shall  be such as may be determined by rules by the Government.   (e) The salaries and allowances of the Chairperson and the others members of the Municipal Taxation Tribunal shall be paid from the Municipal fund.    (3) In every appeal, the costs shall be in the discretion of the Municipal Taxation Tribunal or the Bench thereof, if any.  (4)  Costs  awarded  under  this  section  to  the  [a Corporation] shall be recoverable by the [a Corporation] as an arrear of tax due from the appellant.  (5) If [a Corporation] fails to pay any costs awarded to an appellant within ten days from the date of the order for  payment  thereof,  the  Municipal  Taxation  Tribunal may order the Commissioner to pay the costs to the appellant.  170. Conditions of right to appeal.  No appeal shall be heard or determined under section 169 unless—  

(a) the appeal is, in the case of a property tax, brought within thirty days next after the date of authentication  of  the  assessment  list  under section  124 (exclusive  of  the  time requisite  for obtaining a copy of the relevant entries therein) or, as the case may be, within thirty days of the date  on  which  an  amendment  is  finally  made

6

under section 126, and, in the case of any other tax, within thirty days next after the date of the receipt  of  the  notice  of  assessment  or  of alteration of assessment or, if no notice has been given,  within  thirty  days  after  the  date  of  the presentation of the first bill or, as the case may be, the first notice of demand in respect thereof:  Provided that  an appeal may be admitted after the expiration of the period prescribed therefor by this  section  if  the  appellant  satisfies  the (Municipal  Taxation  Tribunal)  that  he  had sufficient  cause  for  not  preferring  the  appeal within that period;  (b) The amount, if any, in dispute in the appeal has been deposited by the appellant in the office of [a Corporation].  

171. Finality of appellate orders.  The order of  the [Municipal  Taxation Tribunal] confirming, setting aside or modifying an order in respect of any rateable value or assessment or  liability  to  assessment  or  taxation  shall  be final:  Provided that it shall be lawful for the [Municipal Taxation Tribunal], upon application or on its own motion,  to  review  any  order  passed  by  it  in appeal within three months from the date of the order.          

6. There is an inherent right to approach a civil court.

The bar on a civil court’s jurisdiction is not to be readily or

7

lightly  inferred.  The  jurisdiction  of  civil  courts  can  be

excluded  by  an  express  provision  of  law  or  a  clear

intendment  in  such  law.   Wolverhampton  New

Waterworks Co.  v.  Hawkesford2 resolved  the dispute

pertaining to the bar on jurisdiction of civil courts, in the

following manner:

"One is where there was a liability existing at common law,  and that  liability  is  affirmed by a  Statute  which gives a special  and peculiar form of remedy different from the remedy which existed at common law: there, unless the Statute contains words which expressly or by necessary implication exclude the common law remedy the party suing has his election to pursue either that or the  statutory  remedy.  The  second  class  of  cases  is, where the Statute gives  the right  to sue merely,  but provides, no particular form of remedy: there, the party can only proceed by action at common law. But there is a  third  class,  viz.,  where  a  liability  not  existing  at common law is created by a Statute which at the same time gives a special and particular remedy for enforcing it........  The remedy provided  by  the  Statute  must  be followed and it is not competent to the party to pursue the course applicable to cases of the second class."

2 [1859] 6 C. B. (NS) 336

8

7. In a case arising under the Sea Customs Act (1878),

the  Privy  Counsel  in  Secretary  of  State  v.  Mask3

observed as follows:

“It is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion  must  either  be  explicitly  expressed  or  clearly implied. It is also well settled that even if jurisdiction is so excluded, the civil courts have jurisdiction to examine into cases  where  the  provisions  of  the  Act  have  not  been complied with, or the statutory tribunal has not acted in conformity  with  the  fundamental  principle  of  judicial procedure."   

8. 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.  After taking note of

several judgements of this Court on the point of ouster of

jurisdiction  of  the  civil  courts,  Hidayatullah,  J.  in

Dhulabhai and Ors. v. The State of Madhya Pradesh

and Anr.4  observed as follows:  3 AIR 1940 PC 105  4 1968 (3) SCR 662 at 682  

9

(1) Where the Statute gives a finality to the orders of the special tribunals the Civil Courts' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil  Courts would normally do in a suit. Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity  with  the fundamental  principles  of  judicial procedure.  (2) Where there is an express bar of the jurisdiction of the  Court,  an  examination  of  the  scheme  of  the particular Act to find the adequacy or the sufficiency of the  remedies  provided  may  be  relevant  but  is  not decisive to sustain the jurisdiction of the Civil Court.  

Where  there  is  no  express  exclusion  the examination  of  the  remedies  and  the  scheme of  the particular  Act  to  find  out  the  intendment  becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the Statute creates a special right or a liability and provides for the determination of  the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said Statute or not.  (3) Challenge to the provisions of the particular Act as ultra  vires  cannot  be  brought  before  Tribunals constituted under that Act. Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.  

10

(4)  When  a  provision  is  already  declared unconstitutional.  or  the  constitutionality  of  any provision is to be challenged, a suit is open. A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.   (5) Where the particular Act contains no machinery for refund' of tax collected in excess of constitutional limits or illegally collected a suit lies.  (6)  Questions  of  the  correctness  of  the  assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the particular Act. In either case the  scheme of  the  particular  Act  must  be  examined because it is a relevant enquiry.  (7) An exclusion of the jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply.

9. 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

11

Sections, read together, create a bar on the jurisdiction of

civil courts.   

10. Any  person  having  a  grievance  that  he  had  been

wronged or his right has been affected can approach a civil

court  on  the principle  of  'ubi  jus  ibi  remedium' -  where

there is a right, there is a remedy.  As no internal remedy

had been provided in different statutes creating rights or

liabilities,  the  ordinary  civil  courts  had  to  examine  the

grievances in the light of those statutes. With the advent

of  a  ‘Welfare  State’,  it  was  realised  that  enactments

creating  liabilities  in  respect  of  payment  of  taxes,

obligations after vesting of estates and conferring rights on

a  class  of  citizens,  should  be  complete  codes  by

themselves. With that object in view, forums were created

under  the  Acts  themselves  where  grievances  could  be

entertained on behalf of the persons aggrieved5.

11.    Wherever  a  right  or  liability,  not  pre-existing  in

common law is created by a statute and that statute itself

provides  a  machinery  for  enforcement  of  such  right  or

liability,  both  the  right/liability  and  the  remedy  having

been created  uno flatu and a finality is  intended to  the 5 Shiv Kumar Chadha Etc. Etc v. Municipal Corporation of Delhi (1993) 3 SCC 161

12

result  of  the  statutory  proceedings,  then,  even  in  the

absence of an exclusionary provision the jurisdiction of the

civil court is impliedly barred6.

12. We find that a liability for payment of tax is created

by the Delhi Municipal Corporation Act, 1957.  Further, a

remedy  by  way  of  an  appeal  against  an  order  of

assessment, before an appropriate forum or authority, has

been provided by the same statute.  

13. As to various issues on the correctness of  a return

itself, or whether or not a return is correct; whether or not

transactions  which are not  mentioned in  the return,  but

about which the appropriate authority has knowledge, fall

within  the mischief  of  the  charging  section;  what  is  the

true  or  real  extent  of  the  transactions  which  are

assessable; all these and other allied questions have to be

determined by the appropriate authorities themselves.  An

assessment, based even on an erroneous finding about the

character of the transaction, is an assessment made well

within  jurisdiction and cannot  be said  to  be outside the

purview of the Act7.   In a case arising out of the Madras

6 Raja Ram Kumar Bhargava (Dead) By LRs v. Union of India (1988) 1 SCC  681  7 Kamala Mills Ltd v. State of Bombay (1966) 1 SCR 64

13

General  Sales  Tax  Act,  this  Court  observed  that  the

expression “any assessment made under this act” is wide

enough to cover all assessments made by the appropriate

authority under the Act, whether the said assessments are

correct or not.8  If the appropriate authority has been given

the jurisdiction to determine the nature of the transaction

and proceed to levy a tax in accordance with its decision,

even  if  such  issue  is  erroneously  determined  by  the

authority,  the  tax  levied  by  it  in  accordance  with  its

decision  cannot  be said  to  be ‘without  jurisdiction’.  See

(Kamla Mills - supra).

14. Applying  the  criteria  mentioned  in  Dhulabhai

(supra),  we  are  of  the  opinion  that  the  Civil  Court’s

jurisdiction is impliedly barred for the following reasons:

(i) There is no pre-existing liability of tax under Common

Law. The liability has been created by Delhi Municipal

Corporation Act  along with a remedy by way of  an

appeal to the Municipal Taxation Tribunal. Necessarily,

where  a  party  aggrieved  by  the  decision  of  the

authorities  has  to  resort  to  the  remedy  provided

under the Statute, civil courts’ jurisdiction is barred. 8 Firm of Illuri Subbaya Chetty and Sons v. State of Andhra Pradesh, AIR 1964 SC 322

14

See (In  Firm  Seth  Radha  Kishan  v.

Administrator, Municipal Committee, Ludhiana9,

Firm of Illury Subbayya and In Ram Swarup and

Ors. v. Shikar Chand10.  

(ii) Section 171 of the Act gives finality to orders passed

by  Municipal  Taxation  Tribunal,  which  shows  the

intendment of the legislature to exclude jurisdiction of

civil courts.

(iii) The remedy provided by Section 169 of the Act is an

adequate  and  effective  remedy.  We  are  not  in

agreement  with  the  High  Court  that  an  appeal

provided  by  the  Statute  against  orders  of

assessments, containing an ‘onerous’ pre-condition of

deposit  of  the  entire  amount  in  dispute,  is  not  an

effective remedy.    

15. We seek support for these views from a judgement of

this Court in Srikant K. Jituri v. Corporation of the City

of Belgaum11. The question that arose for consideration of

this  Court  in  the  said  judgment  was  regarding  the

jurisdiction  the  civil  courts  being  barred  by  Rule  25 9 AIR 1963 SC 1547 10 AIR 1966 SC 893 11 (1994) 6 SCC 572

15

contained  in  Part-I  of  Schedule-III  of  the  Karnataka

Municipal  Corporations  Act,  1976.  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.

16. We  have  examined  the  plaint  filed  by  the

Respondents carefully.  We do not see any allegation made

regarding  the  violation  of  any provisions  of  the  statute.

There is also no pleading with regard to non-compliance of

16

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.   Therefore,  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.   

17. For  the  aforementioned  reasons,  judgement  of  the

Division  Bench  of  the  High  Court  is  set  aside  and  the

appeals are allowed.   

                   ..…................................J.                                                                    [L. NAGESWARA

RAO]

17

                                                                  .. ….............................J.

                                                                 [HEMANT GUPTA] New Delhi, August 19, 2019  

18