Calcutta High Court (Appellete Side)
Unmesh Properties Private ... vs State Bank Of India And Others on 2 May, 2023
In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
The Hon'ble Justice Sabyasachi Bhattacharyya
W.P.A. No.4153 of 2015
Unmesh Properties Private Limited and another
-Versus-
State Bank of India and others
For the petitioners : Mr. Sandip Kumar De,
Mr. Abhijit Sarkar,
Mr. Abhik Chitta Kundu,
Mr. Souvik Sana
For the State Bank of India : Mr. Debashis Saha,
Hearing concluded on : 11.04.2023
Judgment on : 02.05.2023
Sabyasachi Bhattacharyya, J:-
1. On December 24, 2002, by a registered deed, the Union of India,
through the State Bank of India (SBI) (respondent no.1) as its
custodian, sold a property to the petitioner no.1-Company.
2. The current dispute arises on the basis of a clause in the sale deed to
the effect that the vendor shall bear all municipal taxes for
consolidated taxes, supplementary municipal tax bills and commercial
surcharges relating to the entire period prior to the date of the sale
deed.
3. The State Bank of India communicated to the petitioner vide letter
dated September 11, 2002 that the Bank shall be liable to pay
municipal tax and/or other statutory dues in respect of the property
till the date on which the petitioner purchased the property and that it
would undertake all tax liability, etc., before such transfer by
execution and registration of the conveyance deed, in which regard the
Bank gave its "assurances and unfettered promise".
4. Such stand was reiterated by the Bank subsequently, however, with
the rider that it would retain Rs.54,00,000/-, upon receipt of
Rs.8,00,00,000/- towards final payment of the property, exclusively
for payment of municipal tax and/or other statutory dues in respect of
the property, if any, imposed by the Kolkata Municipal Corporation
(KMC) and payable after contest. The respondent no.1 further
stipulated that it would hold the fund for the said purpose till March
15, 2003 and any demand must be made within the said date,
whereafter the Bank or Government of India would have no liability in
any manner.
5. The petitioners gave a reply on December 20, 2002, that is, the very
next date, expressing their disagreement to the Bank's proposal that
the Bank or Government of India would have no liability beyond
March 15, 2003. Subsequently, a writ petition bearing WP No.825 of
2003 was preferred by the petitioners. At the same time, WP No.587
of 2003 was also filed by the petitioners with regard to the liability of
the respondent no.1-Bank to retain Rs. 54,00,000/- after March 15,
2003.
6. Vide order dated December 18, 2003, a co-ordinate Bench of this
Court decided the writ petition, bearing WP No.587 of 2003, thereby
directing the State Bank of India to deposit the sum of Rs.54,00,000/-
with the Corporation on account of the Corporation dues, due and
payable on account of the said property up to December 23, 2002 (the
date prior to the purchase by the petitioners). A challenge was
preferred by the Bank against the said order, which was decided by
the concerned Division Bench on August 4, 2004, thereby affirming
the order of the learned Single Judge.
7. The Union of India preferred an appeal bearing Civil Suit No.5640 of
2006 against the order of the Division Bench before the Supreme
Court, which was decided on April 27, 2011 by dismissing the said
appeal of the Union of India, however, making it clear that the deposit
with the Corporation on account of the Corporation dues in respect of
the subject-property "is subject to final assessment and the decision
of the Calcutta High Court in Writ Petition No.825/2003".
8. Subsequently, however WP No.825 of 2003, filed by the present
petitioner against the Corporation, was dismissed on November 15,
2014 for non-prosecution.
9. The petitioners plead that in view of such non-prosecution, the sum
calculated to be due as municipal taxes up to December 23, 2002 was
about Rs.70,00,000/- and have filed certain documents in that
regard.
10. Since Rs. 54,00,000/- had already been deposited with the
Corporation, the present writ petition has been filed by the petitioner
seeking a direction on the respondents, being the Bank and the Union
of India, to pay the additional amount of Rs.16,14,048.74p as balance
quantum of the demand on account of the municipal rates and taxes
for the period of occupation of Union of India, out of the total
aggregate of Rs.70,14,048.74p as determined by the KMC.
11. Such arguments are controverted by the SBI, which argues that the
liability of the Bank was limited to the extent that the Bank was a
custodian on behalf of the Union for a limited period, which expired
long back.
12. It is further argued that, at the worst, it was the vendor/Union which
was to pay the municipal taxes for the property till it was purchased
by the petitioner. The Bank's liability, as repeatedly reiterated in
communication, was up to the limit of Rs. Rs.54,00,000/-, as also
admitted by the Union.
13. Moreover, it is contended that the petitioner deliberately permitted WP
No.825 of 2003 to be dismissed for non-prosecution, without pursuing
the challenge against the final assessment of municipal taxes for the
relevant period by the Corporation, thereby compromising the interest
of the respondents. Since the Supreme Court had observed that the
payment of Rs. 54,00,000/- would be subject to the final assessment
made and the result of the said writ petition, such process was
frustrated by the petitioners themselves, for which they cannot claim a
premium.
14. At the stage of final hearing, although the matter was taken up on
repeated dates, the Union of India was last represented on April 5,
2023. Thereafter the matter was called on for hearing on April 10,
2023 and on April 11, 2023, but the Union remained unrepresented
on both of such dates. Hence, the matter is taken up for decision ex
parte against the Union of India.
15. A perusal of the deed of sale executed by the Union of India as vendor
in favour of the petitioner no.1 clearly shows that Clause (f) thereof
mandates that the vendor shall bear and pay all municipal bills for
consolidated taxes, supplementary municipal tax bills and commercial
surcharges relating to the entire period prior to the date of the deed
(that is, up to December 23, 2002), even if such supplementary bills
and other bills shall be issued by the Calcutta Municipal Corporation
and if the bills/payment/claim/supplementary bills be for either
consolidated rates and taxes for the separate portions and/or for
commercial surcharges and any other kind of charges under the
municipal laws or any other statutes and relating to the period post or
prior to the conveyance dated March 29, 2001 till the execution of the
deed, after which the same was to be borne by the purchaser.
16. Hence, the vendor, that is the Union of India, could not at any point of
time avoid such liability.
17. It is evident from the affidavit-in-opposition filed by the Bank that the
Government of India, Ministry of Finance, Department of Financial
Services, vide communication dated March 28, 2014, had intimated
the Bank, in reply to the State Bank of India's letter dated January
31, 2014 to convey the approval of the competent authority for
making payment of Rs. Rs. 54,00,000/- to the KMC in compliance
with the directions of the Hon'ble Courts and remitting the balance
amount, if any, to the Government of India so as to close the SDFC
portfolio assigned to SBI pertaining to the property-in-dispute and
exonerate SBI from its role as a custodian.
18. Hence, as per the Union of India, even on March 28, 2014, the SBI
was playing the role of custodian with regard to the sale on behalf of
the vendor.
19. A perusal of the Bank's communications at various stages clearly
indicates the unambiguous admission of the Bank that it was liable to
pay at least to the tune of Rs. 54,00,000/- as custodian on behalf of
the vendor, in lieu of municipal taxes and other statutory dues in
respect of the property up to the date of purchase by the petitioner
no.1. Even after giving its assurance and "unfettered promise" vide
communication dated September 11, 2022, the Bank attempted to
resile from the same by the subsequent communication dated
December 19, 2002.
20. However, such attempt by the petitioner was set aside by the order
dated December 8, 2003 passed by the learned Single Judge directing
the SBI to deposit Rs.54,00,000/- with the Corporation, which was
affirmed by the Division Bench on August 4, 2004.
21. Interestingly, the Supreme Court, while disposing of the appeal
preferred by the Union of India against the order of the Division Bench
affirming the deposit of Rs. 54,00,000/- by the SBI with the
Corporation, was pleased to make the same subject to "final
assessment" and the "decision of the Calcutta High Court in WP
825/2003".
22. Hence, the legal position after the order of the Supreme Court was
that the deposit of Rs. 54,00,000/- was given a stamp of approval by
the Court, however, keeping the same subjected to the final
assessment and the decision of this Court in WP No.825 of 2003.
23. At that juncture, neither the Union of India nor the State Bank of
India expressed their desire to challenge the quantum assessed by the
Corporation.
24. Subsequently, upon the Corporation having finally assessed the
payable tax up to December 23, 2002 to be Rs.70,14,048.74p, there
was also no challenge to the same on the part of either the Bank or
the Union. Hence, the post facto argument of the Bank that it could
have challenged the quantum if the petitioner did not compromise the
challenge by not proceeding with WP No.825 of 2003, does not lie in
the mouth of the Bank or the Union.
25. The assessment of the Corporation having reached finality and being
prima facie established by the annexures to the pleadings in the writ
petition, there cannot be any further scope of the respondents denying
such liability. However, it is between the Union of India and the SBI
to ascertain as to whether liabilities above Rs. 54,00,000/- were to be
met by the Bank or the Union.
26. Vis-à-vis the petitioner no.1, however, in view of Clause (f) of the Deed,
there could not be any doubt that it was the exclusive liability of the
vendor, as principal, to meet such claim of the petitioner. In view of
the unequivocal assurance given in the Deed that the vendor would
meet all municipal taxes up to the date of purchase that is up to
December 23, 2002, the Union of India cannot shirk such liability
now. Hence, it is for the Union of India to pay the balance amount
over Rs. 54,00,000/- to the Kolkata Municipal Corporation in lieu of
taxes up to December 23, 2002.
27. Accordingly, WPA No.4153 of 2015 is allowed, thereby directing the
Union of India, being the respondent no.4 herein, to deposit the
amount of Rs.16,14,948.74p, being the balance of the demand on
account of the municipal taxes during the period of occupation of the
vendor through its custodian, the SBI, with the Kolkata Municipal
Corporation, within May 31, 2023. Upon such deposit being made,
credit for the same would be given to the petitioners in respect of the
future taxes payable in respect of the disputed property.
28. It will, however, be open to the Union of India to claim such amount
against the State Bank of India (respondent no.1), if the Union of India
has a legitimate claim against the latter.
29. There will be no order as to costs.
30. Urgent certified server copies, if applied for, be issued to the parties
upon compliance of due formalities.
( Sabyasachi Bhattacharyya, J. )
