PUWADA ATCHIRAJU Vs. B VEERAIAH

JUDGEMENT

(1.) .These wo appeals arise out of the decrees and Judgment in A.S. Nos. 2 and 4 of 1962, on the file of the Subordinate Judge, Srikakukm, which were preferred against the decision of the District Munsif, Parvatipuram, in O.S. Nos. 335 and 85 of 1957 respectively. O.S. No. 85 of 1957 was laid by one J. Koteswara Rao, lessee of a premises known as Victory Rice and Groundnut Oil Mill, bearing Assessment Nos. 881 to 885 in Parvatipuram Municipality, which was the representative-in-interest of the Parvatipuram Panchayat. Koteswara Rao filed the suit for a declaration that the assessment fixed on the above premises is illegal, excessive, and arbtrary, and for an injunction restraining the Panchayat Board frcm collecting the assessments as fixed by it. The Panchayat Board, in its turn, filed O.S. No. 335 of 1957 to recover the amount of house-tax due in respect of the aforesaid five assessment numbers for the year 1956-57, from the owner of the premises, P. Atehiraju, the 1st defendant, and the lessee or occupier. Koteswara Rao, the 2nd defendant. The lessee (assessee) contended, inter alia, that the assessment if arbitrary and illegal and in Violation of the provisions of the Madras Village Panrhayats Act, 1950, (hereinafter referred to as ' the Act') which, according to both the parties, govern this case, as the assessment made by the Panchayat has no factual, reasonable or understandable basis. A notice was sent to the Panchayat on 15th October, 1956 protesting against the assessments and intimating that a suit would be filed unless the relief is granted. Since the Panchavat had not ccmplied with the notice, the uit was filed. The suit was resisted by the Panchayat on several grounds, in particular, the taxes under each of the five assessments were fixed en the basis of the annual value of the building, and Were arrived at after proper enquiry. If the levy is excessive, the remedy of the plaintiff under the Act was by way of revision or appeal to the proper authority, and not having availed it, the suit is not maintainable. It is incorrect to say that the assessments were made without any legal basis, or that they Were arbitrary, irregular or unconscionable. The Panchayat has been collecting house-tax at 61/4 per cent, of the annual rental value after due publication in the Gazette from the year 1953 though previously it was levying on the basis of the capital value of the buildings. Even prior to the year 1953, the mill premises were assessed to five different assessments, and it was being paid. The plaintiff paid taxes on some of the assessment numbers since 1st April 1953 without any protest. It was also contended that the suit is barred by limitation under section by of the Act, according to which it should have been filed within six months from the date of the cause of action. The contentions in the suit filed by the Municipality, are substantially the same.

(2.) The learned District Munsif framed appropriate issues in both the suits. He found that the plaintiff, though a lessee of the mill, had locus standi to maintain the suit. He held that the present suit is for declaration and injunction, and that it is a case of continuing injury and governed by the latter part of section 107 (2) of that Act, and period of limitation runs as long as the injury continues and for six mouths after it ceases. In that view he held that the suit was not barred by time. The trial Court further found that the levy of tax of the premises in question under the five assessments was arbitrary capricious and without any legal basis. It was also found that as the assessment was arbitrary and without legal basis, the plaintiff was entitled to maintain the suit even without availing himself of the remedies under the Act. On those findings, the suit instituted by the Municipality was dismissed and decreed the assessee's suit so far as it related to the prayer for declaration, but not for injunction, as the suit of the Municipality was dismissed. Against this decision, the Panchayat preferred two appeals, A. S. Nos. 2 and 64 of 1962, before the Subordinate Judge, Srikakulam. The learned Judge held that t he assessments are not arbitrary, excessive or illegal, that the suit by the assessee is not maintainable and that the assessee's suit is also barred by limitation. On these findings, both the appeals by the Panchayat were allowed. Aggrieved by this decision, these second appeals have been preferred. Sri Kuppuswamy, the learned Counsel for the appellant, raised the following coutentions : (1) The suit by the assessee for declaration and injunction is not governed by s( ction 107 of the Act, but it governed by the residuary Article 120 of the Limitation Act. (2) Even assuming that section 107 applies, the cause of action in the case being a continuing injury, the case comes within the exception contemplated by section 107 (2) of the Act. (3) The assessments have been made by the Municipality without complying with the provisions of the Act and hence they are capricious, arbitrary and illegal, and should be set aside by a civil Court. I shall now consider the validity of these submissions seriatim. The arguments on behalf of the Panchayat that the suit is barred by limitation rests upon section 107 of the Act, which, omitting unnecessary words, is in the following terms : " (1) Subject to the provisions of section 108, no suit or other legal proceeding shall be brought against any panchayat or its president........in respect of any act done or purporting to be done under this Act or in respect of any alleged neglect or default in the execution of thisAct or anyrule, by-law, regulation or order made under it, until the expiration of two months next after notice in writing, stating the cause of action, the nature of the relief sought, the amount of compensation claimed........; and unless such notice be proved the Court shall find for the defendant. (2) Every such proceeding shall, unless it is a proceeding for the recovery of immovable property or for a declaration of title thereto, be commenced within six months after the date on which the cause of section arose or in case of a continuing injury or damage, during such continuance or within six months after the ceasing thereof. (3) * * * * *"

(3.) The Act has substantially reproduced the provisions of the Madras Local Boards Act, 1920, which in its turn, reproduced the provisions of the Local Boards Act of 1884. The sections dealing with the question of notice and period of limitation against local boards and municipalities and unions has been construed in numerous decisions of the Madras High Court as well as the High Court of Andhra Pradesh. The earliest case, Govinda Pillai v. The Taluk Board of Rumbakonam, (1008) I.L.R. 32 Mad. 371 : 19 M.L.J. 333, a Full Bench of the Madras High Court construed section 156, sub-sections (1) and (3) of the Madras Local Boards Act of 1884, the language of which is in pari materia with the section now for consideration. That was a suit for injunction and not for damages or compensation, and the question for consideration was, whether the period of limitation of six months mentioned in the section governed the case. Sir Arnold White, C. J., who spoke for the Court, held that section 156 was intended to apply to an action for damages, and that notice of the action under section 156 (1) was not necessary in the case of a suit for injunction to restrain an immediate injury. The Full Bench further held that when a suit is filed for injunction the six months' limitation provided by the new sub-section (3) of section 156 did rot apply. The earned Chief Justice observed; " It seems to me the governing words are ' such as is described in sub-section (1).' The suit described in sub-section (1) is a suit for which notice of action is necessary. The words of the section as originally enacted, are 'every such action' that is, as I read the section, every action for which notice of action is necessary; and the substitution of the words ' such as is described in sub-section (1) ' for "such action ' can make no difference. As a suit for an injunction is not in my opinion an action such as is described in sub-section (i), sub-section (3) does not apply to such an action. I think the intention of the Legislature was that the class of suits for which notice of action is necessary should be co-extensive with the class of suits to which the six months' limitation applies. The learned authors Darby and Bosanquet on the Statutes of Limitations (supplement to 2nd Edition, p. 592) observes: ' Most of the statutes that provide a special period of limitation also at the same time make notice of action necessary and the decisions on the question whether a person sued is entitled to notice of action are, of course, decisions on the question whether such a person is entitled to the benefit of the special period of limitation prescribed by the Act.' By a parity of reasoning the converse proposition would seem to be good viz., that where notice of action is not necessary the special period of limitation does not apply.'' This authoritative pronouncement of the Full Bench makes the position clear firstly, that the shorter period of limitation of six months applies only to those suits for which notice to the Local Board is necessary, and secondly, that as a suit for injunction, is not a suit for which notice was not necessary, the period of limitation is not six months.