Delhi High Court

Smt. Indu Khorana vs Gram Sabha & Ors. on 26 March, 2010

Author: Veena Birbal

* IN THE HIGH COURT OF DELHI AT NEW DELHI

%                     Judgment reserved on : 11th February, 2010
                      Judgment delivered on: 26th March, 2010


+      W.P.(C) 4143/2003

SMT. INDU KHORANA                             ..... Petitioner
             Through:          Mr. N.S. Vashisht with Mr. Vishal
                               Singh, Advocates


                    -versus-


GRAM SABHA & ORS.                             ..... Respondents
            Through:           Mr. V.K. Tandon, Advocate


CORAM:-
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MS. JUSTICE VEENA BIRBAL


1.     Whether the Reporters of local papers may be allowed to
       see the judgment?   Yes

2.     To be referred to the Reporter or not?     Yes

3.     Whether the judgment should be reported in Digest? Yes


VEENA BIRBAL, J.

1. A Single Judge of this court, while hearing the present

petition, has made a reference to the Larger Bench for

considering certain questions of law as stated in order dated

25.08.2004. This petition is therefore referred to this Bench for

answering the reference.

2. Briefly, the facts of the case are as under:-

Petitioner is the owner/bhoomidar of land situated in

village Kaikorola bearing khasra no. 106/12 min. measuring 1

bigha and 9 biswas. Petitioner constructed a small shed on a

piece of land measuring 100 sq. yards for the storage of gas

cylinders for which permission was granted by the Delhi Fire

Department and also for the storage of implements required for

carrying out agricultural activities. A major portion of the land,

i.e. 1 bigha and 8 biswas is being used for agricultural purposes

only. Petitioner has alleged that the village Kaikorola including

the land in question along with the entire abadi land and the

Revenue Estate of village has been urbanized by the issue of a

notification no. F-33/Engg./TP/DP/11424/94 dated 24.10.1994

under Section 507 of Delhi Municipal Corporation Act, 1957 and

the land is no longer governed by Delhi Land Reforms Act, 1954.

On 29.05.2000, a complaint was filed against the petitioner for

misuse of the aforesaid land. Petitioner replied to the same.

The Revenue Assistant called for the report of Halqa Patwari

and thereafter dismissed the complaint being barred by time

vide order dated 14.05.2001. Aggrieved with the said order,

respondent filed an appeal under Section 185 of Delhi Reforms

Act which was accepted by the Deputy Commissioner, District

South-West, Najafgarh, vide order dated 05.12.2001. Aggrieved

with the same, petitioner filed a revision petition which was

dismissed by the Financial Commissioner vide order dated

13.05.2003. Aggrieved with the same, the petitioner filed the

present petition.

3. The stand of the petitioner before the Single Judge was

that the land in question had been urbanized vide notification

issued by the MCD dated 24.10.1994 under Section 507 of the

Delhi Municipal Corporation Act, as such the area in question

ceased to be a rural area and the revenue authorities had no

jurisdiction to deal with the matter and impugned order was

liable to be set aside. In support of his contention, the learned

counsel for the petitioner had relied upon the judgment of

Trikha Ram v. Sahib Ram & Anr.; 69 (1997) DLT 749 and

Madho Prasad v. Shri Ram Kishan & Ors.; 2001 (7) AD

[Delhi 72]. Both the aforesaid cases are decided by a Single

Bench of this court.

It is also the case of the petitioner that the said contention

was also raised before the Financial Commissioner but the same

has not been dealt with in the impugned order.

4. In Trikha Ram v. Sahib Ram & Anr. (supra), it has been

held that once by virtue of notification issued under Section 507

A of Delhi Municipal Corporation Act the land is declared to be

an urban land, it could no longer be classified as village abadi

land within the definition of land under Delhi Land Reforms Act

and the provisions of Delhi Land Reforms Act would not be

applicable. Following the above judgment, another Single Judge

of this court in Madho Prasad v. Shri Ram Kishan & Ors.

(supra) has held that once Section 507 of the Delhi Municipal

Corporation Act notification had been issued urbanizing the

property necessarily Delhi Land Reforms Act will have no

application.

5. In the order dated 25.08.2004, Single Judge has noted

that prima facie issue of urbanization has no concern with the

land use which is regulated by the Master Plan for Delhi.

Learned Single Judge was also of the view that if a land

irrespective of the fact whether it is in an urban or rural areas,

continues to be an agricultural land, prima facie the provisions

of Delhi Reforms Act, 1954 have to apply.

It is observed in the aforesaid order that if the view taken

in Trikha Ram's case and Madho Prasad's case is taken to its

logical conclusion, then all agricultural land of the urbanized

villages would cease to be governed by the provisions of Delhi

Land Reforms Act, 1954 and the Municipal Corporation of Delhi

would be entitled to levy property tax on these lands. It is also

noted in the order of reference dated 25.08.2004 that, under the

Income Tax Act, capital gain is exempted when agricultural

lands are compulsorily acquired and when agricultural land in

an urban area is acquired, what would happen to those

provisions of the Income Tax Act. Further, what would be the

position while valuing the capital cost of the said land under the

Wealth Tax, etc. It is also noted that the above aspects were

never placed for consideration before the two Single Judges,

pronouncing the abovesaid judgments and considering the

wider ramification, the matter has been referred to a Larger

Bench.

6. We have considered the submissions made by the learned

counsels for both the parties.

7. In Trikha Ram v. Sahib Ram & Anr. (supra), it has been

categorically held that once by virtue of notification issued

under Section 507 (a) of Delhi Municipal Corporation Act the

land is declared to be an urban land, it could no longer be

classified as village abadi land within the definition of land

under Delhi Land Reforms Act and the provisions of Delhi Land

Reforms Act would not be applicable. Similar view is taken in

Madho Prasad v. Sh. Ram Kishan & Ors. (supra).

During arguments, learned counsel for the petitioner has

also referred to two more judgments of this court, one is

W.P.(C) No. 479/2004 Ashok Kumar v. Union of India &

Ors., decided on 12.04.2004 by Single Judge of this court

wherein it is held that once land ceased to be rural area,

provisions of DMC Act would apply.

8. The other judgment is CS(OS) No.379/2003 Sh. Sis

Ram & Ors. v. Sh. Lallu Singh & Ors., decided on 09.05.2006

wherein a suit for partition was filed in respect of an abadi land

of a village Mauzpur, Delhi which by notification issued by

Municipal Corporation of Delhi approved by Central

Government in exercise of powers conferred by Clause (a) of

Section 507 of MCD Act, 1957 was declared as an urban area.

The court held that once, on urbanization of land by the said

notification, the same will not be governed by provisions of

Delhi Land Reforms Act.

Above is the consistent view of this court as has been

noted above in four different judgments mentioned above.

9. The question of charging Property Tax by the MCD in an

urbanized area has been considered and concluded by Division

Bench of this Court in Brig. S.C.L. Malik v. MCD, 61(1996) DLT

661 (DB).

In the above case, the petition was filed seeking quashing

of the levy and demand of General Tax on the farm premises of

the petitioner situated in village Khirki, tehsil Mehrauli, New

Delhi, known as 36, Sainik Farms, New Delhi. In the aforesaid

case also notification dated 23.05.1963 was issued by the Delhi

Administration in exercise of powers conferred by Clause (a) of

Section 507 of the Act, the Corporation with the previous

approval of the Central Government had declared that localities

mentioned in schedule appended therewith and forming part of

the rural areas shall cease to be the rural areas including

petitioner's land.

The question of levy and demand of the General Tax on the

said land of the petitioner arose. The Division Bench of this

Court perused the relevant statutory provisions of Delhi

Municipal Corporation Act, 1957 in this regard and relied upon

the judgment of another Division Bench decision of this Court in

Naresh Kumar v. Union of India & Ors. 56 (1994) DLT 746

and held that house alone and not the large tract of agricultural

land over which it stood would be liable to be taxed. The

relevant portion of the said judgment is as under:-

"When the legislature exempts 'agricultural lands' and buildings used substantially for agricultural purposes from the purview of the property tax as stated by us and makes only 'dwelling houses' located therein subject to tax, it will not, in our opinion, be permissible for the assessing authority to

take the entirety of the agricultural land - whatever be its extent - on which the building or farm house is located, for purposes of levying property tax. We are of the view that only such land around the dwelling house which can be said to be reasonably required for the beneficial enjoyment of the dwelling house or farm house, must alone be the subject matter of the tax. This will again depend on the facts and circumstances of each case to be decided by the assessing authority or by the appellate authority before which the matters may be pending. We notice that the Delhi Act does not contain any definition of 'appurtenant land' and therefore the question as to what is 'appurtenant land' in the context of each dwelling house will have to be determined with reference to the size and extent of the dwelling house and on the basis of what can be said to be the land reasonably required for the beneficial enjoyment of the dwelling house. The remaining part of the agricultural land cannot be subjected to property tax." The Division Bench concluded that in case of a farm house the above said will be the principles for assessing the building and appurtenant land to tax."

10. The view taken by the Division Bench is binding on this

Bench. No sufficient reason has been shown to us for taking a

different view other than what has already been taken by

Division Bench earlier. As regards the issues under the Income

Tax Act about the capital gains, being exempt when agricultural

lands are acquired and what would be the position while valuing

the capital cost of the land under the Wealth Tax etc. are

concerned, these issues do not directly arise in this case. As and

when such issues will arise, the concerned authorities would

examine the same in accordance with law.

11. We thus hold that once rural area is urbanized by issuance

of notification under section 507(a) of the Delhi Municipal