International Airport Authority ... vs Municipal Corporation Of Delhi ...
1991 Latest Caselaw 9 Del

JUDGMENT

B.N. Kirpal, J.

(1) The desire not to pay tax is not only the prerogative of the private individual or an organisation but, as is evident from the present case, even a government organisation is not averse to spending considerable amount of money for the purpose of litigating in an attempt to avoid taxes sought to be realised by the Municipal Corporation of Delhi u/S. 113 of the Delhi Municipal Corporation Apt.

(2) Briefly stated, the facts are that the petitioner is an authority constituted under the proviisions of the International Airport Authority Act, 1971 (hereinafter referred to as the 1AA Act). The reason for filing the present writ petition was that a notice of demand dated 16th February, 1987 which was issued by the respondent Corporation levying the property tax of a sum of Rupees 1,71,71, 786.65 P. This was levied in relation to the Indira Gandhi International Airport Terminal II. This demand was raised by bill of 16th February, 1987 and the aforesaid sun included arrears from 1st April 1982 to 31st March, 1986. Tax for the year 1986-87 was also included therein. We may mention here that bills in respect of the subsequent period have also been raised during the pendency of the writ petition.

(3) The main contention of the petitioner in this writ petition is that the property which is being subjected to tax by the Municipal Corporation belongs to the Central Government and, therefore, by virtue of the provisions of Art. 285 of the Constitution, the same is exempt from tax. ln an effort to substantiate this contention, the learned counsel for the petitioner has referred to the various provisions of the Iaa Act. It is contended by the learned counsel for the petitioner that before the aforesaid Act was promulgated, the airports in the country including the Palam Airport at Delhi admittedly belonged to the Union of India. It is submitted that the Iaa Act was promulgated only with a view that the Airport specified in S. 3 shall be administered by the petitioner Authority. In other words, the submission of the learned counsel is that the properly of the Central Government was never transferred to the petitioner and the accretion of the said properties, including the construction to the Indira Gandhi International Airport Terminal Ii was out of the funds provided by the Union of Idia and therefore at no lime can the said property, namely, terminal Ii at Palam Airport, be regarded as belonging to the petitioner Authority. Mr. Dutta has also relied on a decision of the Calcutta High Court which has held that a hotel constructed at the Airport was not liable to pay municipal taxes as the property belonged to the government. The other decision relied upon by the learned counsel was that of a single Judge of the Bombay High Court who had taken a similar view with regard to a hotel at International Airport at Bombay.

(4) Supporting the contention, Mr. S. K. Mahajan on behalf of the Union of India has relied upon , (The Fruit & Vegetable Merchants Union v. The Delhi Improvement Trust), and has contended that the property in question always belonged and continues to belong to the Union of India. It is further contended by Mr. Mahajan that if there is any doubt or dispute with regard to the question as to who is the owner of any, property, then a decision can be taken u/S. 12(3) of the said Act by the Central Govern- ment and that decision is final and binding. According to the learded counsel, in the present case the Government had decided that the property in question belonged to the Union of India, and in this connection reliance is placed by Mr. Mahajan on the letter dated 4th September, 1981 written by the Director, Ministry of Tourism and Civil Aviation to the Chief Secretaries of Madras, Calcutta and Delhi in which it is stated that the Ministry of law and Justice bad given a legal opinion that the vesting of the properties in the petitioner was for a limited purpose of management of the Airport and that the owner- ship of the properties continued to remain with the Central Government.

(5) Mr. B. Sen, the learned counsel for the respondents I and 2, however, contended that by virtue of the provisions of S. 12, the property in question vested with the petitioner Authority and that the said property belongs to the petitioner and that the provisions of Art. 285 of the Constitution were not attracted It was also submitted by the learned counsel that the decisions of the Supreme Court in the case of Western Coalfields Ltd. v. Special Area Development Authority, Korba, , as well as that of The Andhara Pradesh State Road Transport Corporation by its Chief Executive Officer, Hyderabad v. The Income-tax Officer, B.I.B. Ward, Hyderabad, , were clearly applicable to the present case. Reliance was also placed by the learned counsel on a Division Bench decision of the Bombay High Court, reported as 1973 Tax Lr 556. The Vidarbha Housing Board Nagpur v. The Income-tax Officer, City and Refund Circle, Nagpur. We will presently refer to the aforesaid decisions but before we do so, it is necessary to refer to the various relevant provisions of the Act.

(6) International Airports Authority Act, 1971 was enacted with a view to provide for the constitution of an Authority for the management of cetain airport?,.where international transport services were operating or were intended to operate. In the statement of objects and reasons, reference is made to a high-powered International Airpots Committee which was appointed in July 1967 under the Chairmanship of Mr. J.RD. Tata. This Committee was formed to determine and advise the Government on the action required to be taken to provide international airports wish building, equipments, facilities etc. The said Committee made a number of recommendations. In the said statement of objects and reasons, it is further stated that, "the committee urged that a Corporation should be set up under the Indian Companies Act, and all the present and further assets of the four international airports placed under its ownership and managemnt, except for the functions of acronautical communication, navigation, and air traffic services as well as weather forecasting services which should continue to be under the control of the Departments of Civil Aviation......," The bill which was prese nted for enacting the said Act sought to achieve the said objectives.

(7) S. 3(1) of the Iaa Act constituted the said Authority. Sub-sec. (2) of S. 3 states that the Authority is a body corpote which would, inter alia, has the power to acquire, hold and dispose of property. The said section also enumerates as to what the Authority shall consist of. The next relevant provision is S. 12(l)(a) and S. 12(3) of the Act which read as under ;

"12,Transfer of assets and liabilities of Central Government to the Authority.- (1)...... (a) all properties and other assets vested in the Central Government for the purposes of the airport and adminis- tered by the Director General of Civil Aviation imme- diately before such day shall vest in the Authority. (b)...... (c)...... (d) ...... (e)...... (f)...... (2)....... (3) If any dispute or doubt arises as to which of the properties, rights or liabilities of the Central Government have been transferred to the Authority or as to which of the employees serving under the Central Government are to be treated as on deputation with the Authority, under this section, such dispute or doubt shall be decided by the Central Government in consulation with the Authority and the decision of the Central Government thereon shall be final."

(8) Section 13 provides that there can be compulsory acquistion of land for the purpose of the Authority under the provisions of the Land Authority Act. Section 14 provides for contracts being entered into by the Authority and the manner in which the contract is to be executed are provided in Section 15. The functions of the Authority are set out in Section 16, sub-section (1) of which provides that it shall be the function of the Anthoiity to managers the airport efficiently. Sub-sec. (2) requires the Authority to provide at the airports the requisite service and facilities, and sub-section (3) (a) of the said S. 16 requires (he Authority to plan, develop, construct and maintain runways, taxiways, aprons and terminal and ancillary buildings at the airports. Section 17 enables the Authority to charge fees, rent etc. and according to S. 19, the Authority shall have its own funds. Section 20 refers to the allocation of surplus funds. It, inter alia, provides that after making provision for reserve funds, depreciation etc. the surplus arising out of the balance of the annual net profits shall be paid by the Authority to the Central Government Section \ 21 provides for submission of programme of activities and financial estimate to the Central Government for its approval. According to Section 22, the funds of the Authority shall be invested in the securities of the Central Government or in such mannner as may be prescribed. The Authority can borrow money but with the consent of the Central Government as provided by Section 23. Section 24 states that proper accounts shall be maintained in the manner prescribed by the Central Government in consultation with the Comptroller and Auditor-General of Indian and sub-section (2) of Section 24 stipulates that it is the Comptroller and Auditor-General of India who shall annually audit the accounts. According to Section 31, for the purpose of Income tax Act or any other enactment relating to Income-tax etc., the Authority is to be deemed a company within the meaning of the Income-tax Act, 1961. According to Section 33, the Central Government has the power to temporarily divest the Authority from the management of the airport, if the Central Government is of the opinion that it is in the public interest and necessary or expedient to do so. Under Section 34 the Central Government has the power to supersede the Authority. Section 3 gives powers to the Central Government to issue directions to the Authority, which directions the Authority is bound to follow.

(9) Learned counsel for the petitioner laid emphasis on the fact that the Central Government has complete control over the affairs of the Authority. It was submitted that the appointment of members etc. of the Authority are made by the Central Government. Any section which is of importaance, which is to be taken, requires the approval of ihe Central Government and the surplus funds which are available with the Authority of its net profit also goes to the coffers of the Central Government. Furthermore, the Authority is bound to comply with any direction issued by the Central Government. Learned counsel submitted that under Section 12(l)(a) the properties and other assets which were vested in the Central Government were, after the promulgation of the Act, vested with the Authority, but this vesting was for a limited purpose of management, la other words, the contention was that the ownership of the property, which previously its with the Central Government, was not transferred to the Authority. In was further contended that even if there was any doubt with regard the ownership of the proper ty, the some could be resolved by the Government taking decision under Section 12(3) of the Act and the said decision was final. According to Mr. Dutta, the letter dated 4th Sept. 1981 dearly contains the decision of the Central Government that the building and other immovable property at the airport continued to belong to the Central Government.

(10) Section 12(l)(a) of the Act when carefully, examined, refers to two things-one is the vesting of the assets and the second is the administration of the airport. This sub-section states that the properties at the airport were vested in the Central Government but they were being administered by the Director General of Civil Aviation. After the notification as contemplated bysection 12(1), the properties which were previously vested with the Central Government were henceforth to vest in the Authority.

(11) It is no doubt true that, as held by the Supreme Court in MaharaJ Singh v. State of Uttar Pradesh, , the word 'vest' can have more than one meaning but in the context in which it occurs in Section 12(l)(a), it can have only one meaning and that is that whatever vested in the Central Government prior to the promulgation of the Act and the notificaition issued under Section 12(l ), would henceforth vest in the Authority. As already noticed, S. 12(l)(a) made a distinction between the vesting of the property and the administration thereof, prior to the issuance of the notification under Section 12(1). It is the Central Government in whom the property vested while it was the Director General of Civil Aviation who was administering the same. When in the said provion Section 12(l)(a) and in the same sentence it is stated that the said assets and properties, "shall vest in the Authority" it must necessarily mean that the Central Government stood divested of those properties, which thereafter vested only with the Authority. We have referred to the aims and objects only with a view to show that the intention was to give effect to the recommendation of the J.R D. Tata Committee who had opined that a Corporation should be set up by the Government and all present and future assets should be placed under its ownership.

(12) The matter may be looked into from another point of view. How did the Government and the Authority understand the provisions of Section 12(l)(a) ? The answer to this query lies in the accounts and balance sheets of the Authority which have been audited by no less and authority than the Comptroller and Auditor General of India. What is the exact meaning of the word 'vest' must depend on the facts of each case. It may be said that whether the ownership vesis in Authority or not, may be regarded as to question of fact. In any case, the treatment which is meted in the accounts of the petitioner would help in deciding as to what was the true meaning of the word 'vest' in Section 12(l)(a) of the Iaa and how did the Authority and the Government give effect to it.

(13) Counsel for the petitioner has placed on record the annual report for the year 1988-89 of the petitioner. This report contains Highlights as well as the statement of accounts of the petitioner. At page 25 of the report, the petitioner in the Highlights has set out as to what do they own. It is stated therein that the petitioner owns land, net fixed assets, investment and current assets. This is further elaborated in the balance sheet as on 31st March, 1989 where the value of the gross block and the fixed assets is stated to be Rs. 3,58,80,61,640.00 . The balance sheet further discloses that there is a provision for depreciation for the year 1988-89 which is for a sum of Rs. 1,64,60,60,81,386.00 . Schedule '1' to the balance sheet is a schedule of fixed assets. The details of the gross block contained in the balance sheet are set out in this schedule. This includes freehold land, runways, taxiways, aprons, freehold building including the terminal building, plant and machinery, leasehold building, furniture, fixtures etc. In the note- appended to this Schedule, reference is made to the depreciation which has been provided in this year and for the earlier years. Appended to the balance sheet are the notes forming part of the accounts. In clause 1.2 of the service rules it is mentioned that the Government has permitted the Authority to create a general reserve "up to a limit of 30% of the aggregate gross fixed assets and work-in-progress excluding land owned by the Authority and fixed assets replacement reserves up to 20% of the gross fixed assets......"

(14) Clause 3.4 of the service rule sets out the rates of depreciations which have been claimed by the Authority, and it is clear there from that depreciation has been claimed on terminal building, cargo building, operation building, residential building and temporary building, in addition to the other asset;. Also included in this annual report is he audit report of the Comptroller and Auditor General of India. Clause 2.1 of the said report states that in terms of Section 12(l)(c) of the Act, the Government has issued a notification on 17th Nov. 1980 treating the non-recurring expenditure of Rs. 1800.00 lakhs incurred by the Government up to 31st March, 1972 for or in connection with the four airports, as the capital and loan provided by the Government in equal proportion. Dealing with the fixed assets in that balance sheet, the said report of the Comptroller and Auditor General refers to the valuation of the freehold land as being owned by the Authority.

(15) It is admitted before us by Shri Dutta that not only the assets, which were previously owned by the Central (government, but also the terminal building and other capital assets have been shown in the balance sheet as belonging to itself. It is admitted that included in the value of the gross block are all the terminal building and the land at Indira Gandhi International Airport at Dalhi In the 'Highlight' contained in the Annual Report, it has been clearly stated by the Authority that the land and fixed assets are owned by the Authority. This being so, it is not open to the petitioner to agitate, with any sense of responsibility, that the properties in question belong to the Government.

(16) What clinches the issue is the fact that the Authority has claimed, and has been allowed depreciation on these properties, including Terminal Ii, under the provisions of the Income-tax Act, Depreciation can be claimed under Sec ion 32 of the Indian Income-tax Act. One of the essential ingredients for claiming depreciation is that the capital assets should be owned by the assessed. If the capital assets are not owned by the assessed, no depreciation can be claimed. The petitioner, as already noied, has claimed depreciation and it could have done so only if it regarded it-elf as being the owner of the assets in question. As already stated, it is the Comptroller and Auditor General who has audited the balance sheeis of the Authority. If the assets, namely, the terminal building and land etc. at the Airport at Delhi did not belong to the Authority, and if they had belonged to the Central Government, the Comptroller and Auditor General would have commented upon the same. The balance sheet would net have been audited without any comments thereon. The Comptroller and Auditor General must be regarded as being aware of the fact that depreciation was being claimed by the petitioner by treating the assets as belonging to it If the assets did not belong to the Authority, and had continued to belong to the Central Government, then no depreciation would have been claimed. The Comptroller and Auditor General did not find the balance sheet of the Authority as containing any error in this regard. Obviously, the only conclusion which can be drawn there from is that the Comptroller and Auditor General regarded the assets as being owned by the Authority and not by the Central Government.

(17) In our opinion, the petitioner can, in any case, not be allowed to approbate and reprobate at the same time. To the whole world as well as to the income-tax authorities and the Comptroller and Auditor General, it has been represented that the airports and other fixed assets belonged to the petitioner. It is on this basis that its accounts are finalised, balance sheets prepared and audited and depreciation has been claimed and income-tax assessments finalised. It is only when the Municipal Corporation seeks to levy property tax that a contention is sought to be raised that the fixed assets including the buildings and land do not belong to the Authority. Except for this bare averment in the writ petition, there is no document on the record to show whether the Authority has, at any time, except when trying to avoid the liability to pay municipal tax, represented to any one that it does not own the immovable property in question. On the contrary, as already stated, in the annual report which is freely distributed and which is field with the Registrar of Companies, apart from being filed with the income-tax authorities, it is clearly stated that the said assets belonged to the authority. Furthermore, as is contained in the aforesaid notes to the balance sheet, the Government had spent approximately Rs 1800.00 lakhs, which was regarded as non-recuring expenditure.This included the cost of the Airport and the terminal building. By the notification of 1980, half of this expenditure was converted into capital and half was converted in loan provided by the Government to the Authority. The moment the value of the capital assets is converted into a capital contribution of the shareholder, namely, the Central Government, it must necessarily follow that the assets become the assets of the Authority.

(18) The reliance on the aforesaid letter dated 4th Sept 1981 is completely misplaced. It is evident that this letter was written with a motivation, namely, how to avoid municipal tax. It is a letter written by the Director, inter alia, 10 the Chief Secretary, Delhi and it is stated therein that the Ministry of Low i has given an option that the properties had vested in the Authority for limited \ purpose of management and that the ownership continued to be with the Central Government. This letter cannot be iegarded as an order of the Central Government as contemplated by Sec. 1 (3). This letter is nothing more than an information received from the Ministry of Law. Secondly, an executive order of the Government has to be in the name of the President. This letter is written under the signature of a director and cannot be regarded as an order of the Government, as it is not in the name of the President. That apart. Section 12(3) has relevance to Section 12(l)(a) and no more. Section 12(l)(a) states that all the propel ties which were vested with the Central Government would henceforth vest with the Authority. Section 12(3) refers to doubt or dispute arising as to which of the properties, rights, liabilities of the Central Government have been transferred to the Authority. This is for the purpose of identification of the property which stands transferred. Instead of assessing the petitioner. Section 12(3). on the contrary supports the contention that the word 'vest' occurring in Section 12(1)(a) means transfer of property. Section 12(3) refers to the fact that as a result of this enactment, some properties, rights and liabilities stood transferred to the Authority. The word 'transfer' in Section 12(3) when read in conjunction wich word 'vest' occurring in S. 12(1)(a) can mean only one thing name'y that, the right, title and interest in the pro- perty, which were previously with the Central Government, stood transferred to the Authority.

(19) As already noted. Section 3(2) empowers the Authority to acquire, hold arid dispose of the property, both moveable and immoveable. Therefore, under S. 12(1)(a) the existing property of the Central Government was transferred to the Authority and by virtue of Section 3(2) the said Authority, out of funds available to it, acquired additional properly. Terminal Ii building at Palam Airport, New Delhi was constructed by the Authority after it came into existence and this was not one of the assets which was transferred to or which vested in the Authority under Section 12(l)(a). This building was constructed and the amount spent thereon was capitalised and depreciation claimed and allowed. We fail to understand how under these circumstances, the Authority can turn round and contend that it is not the owner of the assets in question.

(20) It was submitted by the learned counsel for the petitioner that the surplus available with the Authority had to be transferred to the Central Government. Furthermore, it is the Central Government which controls the working of the petitioner who has to seek various approvals from the Central Government.

(21) There is no doubt that the Authority is controlled by the Central Government in the sense that its members are appointed by the Central Government and the Central Government plays a very vital role in the functioning of the Authority. It may be that the Authority has to be regarded as a state within the meaning of Article 12 of the Constitution. But merely because it has to seek approvals of the Central Government does not mean that the Authority itself is the Central Government. If there can be any doubt with regard thereto, that has been completed dispelled by virtue of Section 3(2) of the Act which gives the Authority a light to acquire, hold and dispose of the proper ty. Merely because the properly cannot be disposed of without the consent of the Central Government does not mean that the property is not owned by the Authority. It is pertinent to note that without superseding the Authority, Central Government cannot dispose of the proreity which is vested in the Authority A transaction of sale or transfer has to be executed only by the Authority in the manner prescribed under the Act.

(22) It is undoubtedly true that the Central Government has the power to temporarily divest the Authority from the management of the airport. But merely because this statutory power is conferred on the Central Government under Section 33 of the Act, does not mean that the property in question does not belong to the Authority. Similarly, merely because Section 3 gives the Central Government power to supersede the Authority cannot lead one to the conclusion that no property can be owned by the Authority. On the contrary, Action 34(2),'c) provides that on publication of the notification superseding the seniority "all property owned or controlled by the Authority shall, until the Authority is reconstituted under sub-sec (3), vest in the Central Government." This provision clearly postulates that there may be a properly which is owned by the Authority. It is irrelevant what is the meaning of the word ''vest in this sub-section because we are concerned with the meaning of the word 'vest' in Section 12(1)(a) which, as we have already held, clearly means that all rights, title and interest which in the Central Government, they stand transferred to the Authority.

(23) In any case, a similar provision came up for consideration before a Division Bench of the Bombay High Court in the case of Vidarbha Housing Board (1973 Tax Lr 556) (supra). In that case, the Board, which had been established under the M.I Housing Board Act of 1950, claimed that the income of the property of the Board was really the income of the property of the Stale Government, and that the Board was merely an agent and, therefore, the notices which were issued under Section 148 of the Income-tax Act were invalid. Reliance was placed in that case on art. 289 of the Constitution. The Court analysed the provisions of the M P. Housing Board Act, 1950 in the following words (at Pp. 560-61 of Tax LR) :

"8 Section 3 of the Madbya Pradesh Housing Board Act, 1950 enacts that with effect from such date as the State Government may, by notification, appoint in that behalf, there shall be established a Board by the name of the Madhya Pradesh Housing Board (which has eventually been dissolved and two Boards in its place, one for Vidarbha region and the other for Mahakoshal region, came to be established) Section 3(2) clearly provides that the Board be a body corpotate having perpetual succession and common seal with power to acquire property both moveable and immovable and shall by the said name sue and be sued While Section 3(3) provides that the Board shall be deemed to be a local authority for the purposes of the Land Acquisition Act, 1994. In other words Section 3 of the Act clearly shows that the petitioner Board has been constituted a body corporate having perpetual succession and common seal and as such it would be a distinct legal entity apart from the State Government Section 4 provides for the constitution of the Board and indicates who shall be members of the Board, who inter alia include representatives of State Legislature and representatives of the other local Bodies. Sections 5, 6,8,9 and 10 deal with the terms of the office and conditions of service of the members, how the vacancies could be filled and the manner in which the business of the Board should be conducted by it. Sections 12 and 13 are rather important. Section 12 provided that the Board shall have its own funds and may accept grants, subventions, donations, gifts or loans from the Central or the Stale Government or a local authority or any individual or body whether incorporated or not for a or any of the purpose of the Board and Section 13 provides that all properties, fund and all other assets vesting in the Board shall be held and applied by it, subject to the provisions and for the purposes of the Act. The provisions of these two sections make it very clear that the Board which is a distinct legal entity will have property and assets of its own and all property, fund and other assets shall stand vested in the Board and the Board is enjoined with a duty to apply the funds and assets only for the purposes of the Act and for no other purpose. Section 12 clearly indicates that the Board can have loans from the Central or State Governments or local authorities, In other words, it can borrow loan from the State Government over which naturally it has to pay interest to the State Government. Section 14 empowers the Board to make contracis that may be considered necessary or expedient for carrying out any of the purposes of the Act. Chapter Ii of the Act deals with housing schemes which are required to be framed and under taken by the Board. Under Sections 18 and 19 provision has been made for acquisition of property for the purposes of the Board and payment of compensation in respect of property thus acquired for it. Chapter Iii deals with acquisition and disposal of lands by the Board and power has been conferred upon the Board to enter into an agreement or agreements with person or persons for the acquisition from him or them by purposes, lease or exchange of any land which is needed for the purpose of a housing scheme; similarly, power has been given to the Board, subject to the rules framed by the State Government to dispose of its land. Then comes Chapter Iv which deals with miscellaneous matters. Under Section 27 the power has been conferred upon the Board to borrow sums required for its purposes with the previous sanction of the State Government and subject to the provisions of this Act. Section 28 provides for maintenance of proper accounts and audit thereof by a person authorised by the State Government in that behalf. Section 32A provides that all moneys due to the Board may be recoverable as arrears of land revenue. Section 33 empowers the State Government to act, while Section 34 empowers the Board, with the previous sanction of the State Government, to wake Regulation touching the matters specified therein. Under Section 39 protection has been given against any suit for prosection or other legal proceedings being filed in respect of anything done in good faith and purported execution of the provisions of the Act. Section 40 is very material. It provided for dissolution of the Board by the State Government by a notification and it has been provided that no such dissolution could be made by the State Government unless a resolution in that behalf has been moved and passed by both the Houses of the State Legislature. What should happen with regard to the assets and properties of the Board after a dissolution has been provided for under sub-section (2) of Section 40 and since, in our view, it is a very material provision, we would rather set it out verbatim. Section 40(2) runs as follows : 40(2): With effect from the date specified in the notification under sub-section (1)- (a) all properties, funds and dues which are vested in or realizable by the Board shall vest in and be realizable by the State Government; and (b) all liabilities enforceable against the Board shall be enforceable against the State Government to the extent of properties, fund and dues vested in and realised by the State Government. "

(24) After referring to the said provisions, the Court held that the Board was a separate legal entity and it could not be regarded as an agent or department of the State Government. It is pertinent to note that Section 32A of the M.P. Housing Board Act, 195U provided that all moneys due to the Board could be recoverable as arrears of land revenue, nevertheless the Court held that the said section merely provided a mode of recovery of moneys due to the Board but this did not mean that the property and the moneys were of the State Government. Section 40(2) of the M P. Housing Board Act, 1950 was similar to Section 34 of the Iaa Act, 1971 for the said section also provided for the assets of the Board to vest in the Government when a notification for dissolution of the Board is issued under Section 40(1). Reverting to this provision, the Bombay High Court observed as follows : (at Pp. 562-63 of 1973 Tax Lr 556): "The other provision which, in our view, is of a clinching character is the one to be found in Section 40(2) of the Act. That provision indicates as to what should happen to the property and assets of the Board upon its dissolution being made by the State Government. Under sub-clause (a) of sub-section (2) of Section 40 it is provided that with effect from the date specified in the notification under sub-section (1), all properties, funds, dues which arc vested in or realisable by the Board shall vest in and be realiable by the State Government If the Board was acting as a department of the State Government or was merely an agent undertaking the activities for and on behalf of the State Government, it was utterly unnecessary to make the provision of the type indicated above. The very fact that provision has been made in Section 40(2)(a) that upon the dissolution of the Board, all Board shall vest in the Government clearly shows that the Board is a distinct entity and is not an agent or a department of the State Government. Similarly, Section 4C(2)(b) is indication in the same direction It provides that all liabilities enforceable against the Board shall be enforceable against the State Government, but only to the extent of the properties, funds and dues vested in and realised by the State Government. In other words, upon the dissolution of the Board, if the Board is found to have created liability in excess of its assets or properties and funds which shall vest in the State Government then the State Government is not responsible for such excess liabilities incurred by the 345 Board. If the Board were merely acting as a department of the State Government or as an agent of the State Government, then the State Government would have been liable for all the liabilities created by the Board."

(25) We are in respectful agreement with the aforesaid observations and in our opinion Section Section 34 does not show that the properties i question were owned by theCentral Government.

(26) SHRI-DUTTA referred to and relied upon the decision of- the-Single Bench of tile-Calcutta High Court in the matter of India Tourism Development Corporation Ltd. v. Municipal Commissioner of Dum Dum Minicipality Civil Rule-No3918(W) of 1980, decided by the single Judge, on 30th Sept, 1983. This decision was confirmed by the Division Bench of the said court on 18th Sept.1987 in RM.AT No. --052 of 1984. Both the single Judge as 'well as the Division- Bench were. concerned with the case of HotelAirport Ashok construtted at Dum Dum Airpor. The Court proceeded on the basis- that the land on which the hotel was constructed was held by the International Airport Authority. The Court, however held that the land belonged to the Union of India. Tha single Judge observed as follows: A "On an analysis of the provisions of this Act it appears, that ihe scheme of the Act is that the vesting of the properties of the Central Government in the Airport Authority is for the limited; purpose of administration and management. The title.or the proprietorial interest of the Central Government in such properties are not intended to be transferred. In theFruit and Vegetable Merchant's Union (supraP) the SupremeCourt considered and construed the expression.- "vest"following the principles of construction laid down by the Supreme Court, in construiag the Airport Act is appears that the vesting of the properties of the Central Government with the Airport Authority is for the.limited purpose of administration and management and complete, title to such properties is not transferred' Under the Land Acquisition Act of 1894, it was noted by. the Supreme Court, incertain contingencies vesting would be absolute and free from all encumbrances. Language of S. 12 of the Airport Act is different and noneof the sections of the Act provide for absolute vesting of properties of the Central Govt. With- the Airport Authorities, I respectfully agree with the view taken by the Gujarat High Court in "The Board of' Trustee of the Port of Kandla" (l979 Tax. LRNOC109: 20- Guj LR' 732) (Supra) where similar provisions of the Major Port Trust Act, 1953 were construed by the Gujarat- High Court. In the instant case.the Central Govt. by its communication 346 dated the 4th Sept. 1981 through the Ministry of Tourism and Civil Avitation and also in the affidavit filed on its behalf has recorded its decision in respect of the property in dispute in no uncertain terms."

(27) The aforesaid vicw of the single Judge was approved by the Division Bench in its judgment dated 18th September, 1987. With respect, we find ourselves unable to agree with the aforesaid conclusion. It may be seen that the High Court did not analyze S.12(l)(a) and did not consider the effect of the use of the word 'transfer' in S. 12(3) of Iaa Act. Furthermore, the attention of the Calcutta High Court was not drawn to the balance sheet and the accounts of the petitioner which clearly show that all the fixed assets are regardedby the petitioner as being owned by it and on which depreciatioa is claimed. The letter dated 4th September, 1981 which was also relied upon by the Calcutta High Court cannot be regarded as a decision u/S. 12(3) and nor can the affidavit filed by the Union of India be regarded as such a decision. The said letter was written in an attempt to avoid payment of the municipal taxes. The Central Government as well as the Comptroller & Auditor General and the Authority have always regarded the fixed assets as belonging to the Authority as is evident from the treatment which has been meted to these assets in authority's own accounts which were approved by the Comptroller & Auditor General and which accounts were ultimately placed before the Parliament.

(28) Another decision on which reliance was placed by Mr. Dutia was of the Bombay High Court in the case of International Airports Authority of India v. The State of Maharashira in writ petn. No 26 of 1981, decided by a single Judge on 13tb/l4th November, 1984 Reported in 1985 Mah Lj 345 While referring to the decision of the Supreme Court in Fruit & Vegetable Merchants Union (AIR 195/ Sc 344) (supra), the Court held that the word 'vest' has not a fixed connotation and the High Court relying upon the aforesaid judgment of the single Judge of Calcutta High Court in India Tourism Development Corporation Limited (supra), came to the conclusion that the property belonged to the Central Government. We find that the attemption of the learned single Judge was not drawn to the annual report and balance sheet of the Authority in which the Authority has admitted that the fixed as ets belonged to it, and on which the Authority had claimed depreciation. Furthermore this decision runs counter to the earlier Division Bench judgment of the same Court in Vidarbha Housing Board's case (1973 Tax Lr 556) (Bombay) (supra).

(29) At the time of arguments, the petitioner had placed on record copies of the khasra girdawaries which show that it is the Central Government which has been recorded as owner of the land. In our opinion, much reliance cannot be placed on this. Firstly, it is settled law that the Khasra Girdawari is cot a record of right. Secondly, this was never relied upon in writ petition. That apart, the petitioner has itself treated in their own accounts all these buildings, as belonging to it and it has come to the Court merely because it has now been asked to pay dues to the Corporation.

(30) Mr. S.K. Mahajan also contended on behalf of the Union of India 347 that the property in question belongs to the Central Government. In addition to what has been contended by Mr. Dutta, the learned counsel has relied upon . In our opinion that case is clearly distinguishable.

(31) In the Fruit &Vegetable Merchants Union case (supra), the sanction of the market was subject to the remarks that the whole of the land required for the construction of the new market was property of the Government and that the trust will administer the new market on its completion. It was observed by the Supreme Court that "It will thus appear that it was clearly understood . that the land on which the market was to be constructed would continue to be the properly of the Government in modification of the proposal made by the Trust as aforesaid, the Trust only being vested with the power to administer the new market."

(32) It was further held by the Supreme Court that the Trust was in a position to act as a statutory agent of the Government. Therefore, in view of the fact that under the scheme the Government was to continue to be the owner of the property, the aforesaid case is clearly distinguishable, specially when Section 54-A of the UP. Town Improvement Act, as extended to Delhi, finds place in Chapter V-A which is headed, 'Government Properties held by Trust'. Under sub-sec. (1) of S.54-A, the Government was to place the property at the disposal of the Trust and the Trust was to hold the property in accordance with the terms of the scheme. It is in pursuance thereof that it was stipulated that the land in question shall continue to belong to the Government.

(33) No such provision exists in the International Airports Authority Act, 1971, which talks of the petitioner being divested of the property.

(34) Mr. Sen has, on the other hand, placed strong reliance on the Andhra Pradesh State Road Transport Corporation case (supra). The question which arose was whether the income of the Corporation could be regarded as Income of the State Government and therefore liable to exemption from tax by virtue of Art. 29 of the Constitution. The Court analysed the provision of the Road Transport Corporation Act, 1950 which is similar to the provisions of the International Airports Authority Act and came to the-conclusion that the income belonged to the Corporation, which was a separate juristic entity. The decision of the Supreme Court in the case of Western Coal fields Ltd. (supra) is, however, more apposite. Property tax was sought to be levied in that case. A contention was sought to be raised that the municipal tax could not be levied on the property of the company by virtue of Art. 285(1) of the Constitution because the company was owned by the Government. It was held by the Supreme Court that merely because the entity share capital was subscribed by the Government of India, it did not mean that the company did not own the property in question. It was held that the company was a separate legal entity, and u/S. 5(1) of the Coal Mines Nationalisation Act, the right, title and interest in a national coal -mine vested, by directions of the Central Government, in the company. It is for this reason that the land and building was not to be regarded as the property of the Central Government. It was held that the property vested with the Company and it stood transferred to it after the nationalisation of the coal fields. 348

(35) From the aforesaid it follows that the property in-question, namely, terminal Ii of Indira Gandhi Inteiroational Airport is not the property of the Central Government an I is the property of the Authority, and the respondent Corporation is entitled to levy and realise taxes from the petitioner u/S. 1-17 of the Delhi Municipal Corporation Act.

(36) In the present case the rateable value has been determined by the Corporationn and no contention has been raised before us with regard to the correctness of the same. It is stated by Mr. Dutta the petitioner will seek its remedy with regard to quantification of the tax and the rateable value under the Ac'. We make no observation with regard to this.

(37) This writ petition is accordingly dismissed. The interim order stands vacated.

(38) the petitioner is granted, three weeks time to pay the demand of respondents 1 and 2. Respondent Corporation will be entitled to costs. Counsel's fee Rs..2,000.00.