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            REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.9822 OF 2016 (Arising out of  S. L. P. (C) No.16318 of 2012)

NAGARPALIKA THAKURDWARA       … APPELLANT

VERSUS

KHALIL AHMED & ORS.       … RESPONDENTS

J U D G M E N T

ANIL R. DAVE, J.

1. Leave granted.

2. Being  aggrieved  by  the  Judgment  dated  21.9.2011

delivered by the High Court of Judicature at Allahabad in

Second Appeal No.781 of 2011, the appellant Nagar Palika

has approached this Court by way of this appeal.

3. The  facts  giving  rise  to  the  present  litigation  in  a

nutshell are as under :

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The respondents, who claim to be residing outside the

municipal  limits  of  Nagar  Palika  Thakurdwara,  District

Moradabad,  filed  a  Civil  Suit  being  OS  No.13  of  1994

against  the  appellant  in  the  court  of  Civil  Judge (Junior

Division), Thakurdwara, praying for the following reliefs :

“(a) That the defendant no.1 be restrained by decree

of  permanent injunction that they remain restrained

from  recovery  of  alleged  house  tax  of  Rs.6760/-

regarding crusher in question, present building no.319

and calendaring factory building no.320 and shops in

question,  building  no.321  to  332  respectively  which

are outside the limits of municipality and situated in

village Fatehullah Ganj in property owned by Plaintiff

nos.2 and 3 situated in village Fatehullah Ganj and

from recovery of Rs.4,246.07 amount described in the

recovery  certificate  or  more  by  itself  or  its  agent

defendant  no.2  or  by  any  other  medium  or  be

restrained  from  imposing  any  house  tax  till  the

pronouncement  of  the  properties  in  question  to  be

within the limits of municipality by the Government in

either years.

(b) That the defendant no.1 be ordered to give the

cost of the present suit to the plaintiff(s).

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(c) That the relief which is fit in the opinion of the

Hon’ble Court in favour of the plaintiff(s) be granted.”

Thus,  the  case  of  the  respondents  was  that  their

premises  were  not  within  the  municipal  limits  of  the

appellant Nagar Palika and therefore, the Nagar Palika had

no  right  to  levy  any  tax  on  the  said  properties  of  the

respondents and therefore, the appellant be restrained from

recovering  tax  in  respect  of  the  said  properties  from the

respondents.   The respondents had also impliedly prayed

for a declaration to the effect that they were not liable to pay

any tax to the appellant Nagar Palika under the provisions

of the Uttar Pradesh Municipalities Act, 1916 (hereinafter

referred to as ‘the Act’).   

4. Written Statement was filed by the appellant stating

that the premises of the respondents were very much within

the municipal limits of the Nagar Palika and the said fact

was also known to the respondents as respondent no.1 had

also  contested  an  election  for  being  a  President  of  the

appellant Nagar Palika.  Moreover, it was also the case of

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the appellant that the suit was not maintainable in view of

the provisions of Sections 143 and 160 of the Act.  

5. The  said  suit  was  dismissed  and  therefore,  the

respondents preferred first appeal, being Civil Appeal No.30

of  2008,  before  the  Court  of  Additional  District  Judge,

Moradabad,  which  was  allowed  by  a  judgment  dated

19.7.2011.

6. Being  aggrieved  by  the  aforesaid  judgment  dated

19.7.2011,  the  appellant  filed  Second  Appeal  No.781  of

2011,  which  has  been  dismissed  by  the  High  Court  by

virtue of impugned judgment and therefore, this appeal has

been filed by the appellant.

7. The  short  reason  for  which  the  appeal  filed  by  the

appellant has been dismissed by the High Court is that the

claim in the second appeal was less than Rs.25,000/- and

by virtue of the provisions of Section 102 of the Code of Civil

Procedure,  1908,  no  second  appeal  would  lie  from  any

decree when the subject matter of  the original suit is for

recovery of money not exceeding Rs.25,000/-.

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8. The  learned  counsel  appearing  for  the  appellant

submitted that the High Court committed an error by not

considering  the  fact  that  the  suit  had been filed  seeking

permanent  injunction,  praying  that  the  appellant  Nagar

Palika should be restrained from recovering any tax under

the Act from the respondents as the properties belonging to

the respondents were situated beyond the municipal limits

of the appellant Nagar Palika.   

9. The learned counsel further submitted that the High

Court only considered the amount of tax which was payable

at  the  relevant  time,  which  was  only  Rs.11,006.07,  but

ignored the fact that the suit was also for a declaration to

the effect that the properties of the respondents were not

within  the  municipal  limits  of  the  Nagar  Palika  and

therefore,  no  tax  could  have  been  levied  thereon  by  the

appellant.   Thus,  the  suit  was  not  only  for  recovery  of

money,  but  was  also  for  a  declaration  and  permanent

injunction.  Moreover, it was also submitted that the suit

itself  was  not  maintainable  in  view  of  the  provisions  of

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Sections 140 and 163 of the Act and therefore, the appeal

could not have been allowed by the first appellate court.  

10. On the other hand, the learned counsel appearing for

the respondents submitted that the impugned judgment is

just, legal and proper for the reason that by virtue of the

second appeal filed by the appellant, the appellant wanted

to recover only a sum of Rs.11,006.07 by way of tax from

the respondents.  The learned counsel, therefore, submitted

that the second appeal deserved to be dismissed.   

11. Upon hearing the learned counsel and looking at the

facts of the case and in the light of the legal provisions, we

are  of  the  view  that  the  High  Court  ought  not  to  have

dismissed the second appeal.  

12. Section 102 of the Code of Civil Procedure, 1908, reads

as under :

“102. No second appeal in certain cases. -  No second appeal shall lie from any decree, when the subject matter of the original suit is for recovery of  money  not  exceeding  twenty-five  thousand rupees”.

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13. In the instant case, the suit was not only for recovery

of  money,  but  it  was  for  a  declaration  and  permanent

injunction.  Moreover, the issue with regard to location of

the properties in question had to be decided.  It was to be

ascertained whether the properties were situated within the

municipal limits of the Nagar Palika and if so, whether the

appellant  was  entitled  to  levy  tax  thereon  under  the

provisions of the Act.  If the properties were not within the

municipal limits of the appellant Nagar Palika, the appellant

could  have  been  permanently  restrained  from  recovering

any  tax  under  the  Act  in  respect  of  the  properties  in

question.  Thus, several other issues were also to be decided

in  the  said  suit.   It  is  also  pertinent  to  note  that  the

maintainability  of  the  suit  was  also  challenged  by  the

appellant in view of the provisions of the Act.

14. The purpose behind enactment of Section 102 of the

CPC is to reduce the quantum of litigation so that courts

may  not  have  to  waste  time  where  the  stakes  are  very

meagre and not of much consequence.  In the instant case,

though  apparently  the  amount  which  was  sought  to  be

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recovered was Rs.11,006.07, looking at the prayer made in

the  plaint,  the  consequences  of  the  final  outcome of  the

litigation would be  far-reaching.   

15. So as to avail advantage of the provisions of Section

102  of  the  CPC,  the  subject  matter  of  the  original  suit

should  be  only  recovery  of  money and  that  too,  not

exceeding Rs.25,000/-.  If the subject matter of the suit is

anything other than recovery of money or something more

than recovery of  money,  provisions of  Section 102 of  the

CPC cannot be invoked.  

16. In the instant case, the original suit was not only for

recovery  of  money,  but  was  also  for  a  declaration  and

permanent injunction.  In view of the aforestated fact, the

provisions of Section 102 of the CPC could not have been

applied.   

17. In  the  circumstances,  we  set  aside  the  impugned

judgment and remit the matter to the High Court so that

the Second Appeal can be decided afresh after hearing the

parties concerned.

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18. As the suit was filed in the year 1994 and possibly no

tax might have been recovered by the appellant till now, we

feel that the second appeal should be decided at an early

date.  The parties to the litigation shall appear before the

High Court on 17.10.2016 and the High Court is requested

to fix the date for final hearing of the second appeal so that

the  appeal  can  be  finally  decided  preferably  within  six

months from the date of receipt of a copy of this judgment

by the High Court.  

19. The appeal is, accordingly, disposed of as allowed with  

no order as to costs.

.…………………………….J.                  (ANIL R. DAVE)

……………………………..J.                                (L. NAGESWARA RAO)

NEW DELHI SEPTEMBER  28, 2016.