1 HIGH COURT OF MADHYA PRADESH : JABALPUR BEFORE HON’BLE SHRI JUSTICE SANJAY YADAV, J.Writ Petition No.21854/2011 Jawahar Lal Nehru Krishi Vishwa Vidyalaya Versus Municipal Corporation, Jabalpur and another. ------------------------------------------------------------------------------------ Shri P.N.Dubey, learned counsel for the petitioner. Shri Anshuman Singh, learned counsel for the respondents. ------------------------------------------------------------------------------------ ORDER
(20.8.2013) Solitary issue raised for consideration vide this writ petition under Article 226 of the Constitution of India is as to whether the residential blocks situated within the precincts of the petitioner-University to house the teachers and staff of the University would be subject to property tax under sections 132 and 135 of the Madhya Pradesh Municipal Corporation Act, 1956, when the other buildings and lands and portions thereof used exclusively for educational purposes have been exempted under Section 136 of the 1956 Act. In other words can the residential quarters constructed for teachers and staff be said to be exclusively used for educational purposes, is the precise issue”
2. Challenge in the petition is to the communication dated 04.11.2011 whereby the petitioner has been informed that a property tax under section 132, 135 and 138 of 1956 Act has been imposed on the residential quarters and space occupied by the staff, police station and the bank as tenant and an amount of Rs.1,75,74,913/- for the period from 1997-98 to 2011-12 has been assessed to be paid.
3. Taking into consideration the solitary issue raised in the petition as noted in the beginning, the constitution and the purposes for which the petitioner-University has been established may first be noted before dwelling on the rival contentions.
4. Petitioner-University, owes its existence to the Jawaharlal Nehru Krishi Vishwa Vidyalaya Act, 1963 enacted to establish and incorporate a Vishwa Vidyalaya for Agriculture and Allied Science at Jabalpur to provide for education and prosecution of research in Agriculture and Allied Sciences, extension and other matters ancillary thereto. It is a body corporate (under Section
3) Section 5 empowers the University, besides other things as mentioned therein, to maintain colleges, schools of studies and hostels in the manner prescribed in the statutes; to institute teaching research and extension posts required by the university and to appoint persons to such posts; to 3 supervise and control the residence, conduct and discipline of students of the University and to make arrangements for promoting their health development and general welfare; to create administrative ministerial and other necessary posts and to make appointments thereto; to do all such other acts and things, whether incidental to the powers or not as may be requisite in order to further the objects of the University.
5. That by virtue of sub-section (1) of section 55 of 1963 Act, all Government colleges imparting instructions in Agriculture and Veterinary science and Animal Husbandry for bachelors degree on above and all research stations within the areas specified in sub-section (1) of section 6 operated for carrying out research in Agriculture and Allied Sciences together with lands, hostels and other buildings, furniture, library, books, laboratories, stores, instruments, apparatus, appliances and equipments and live stocks belonging to such colleges and stations and the budget programme made for them has been transferred to and vest in the University with coming into force of 1963 Act.
6. Sub-section (3) of Section 55 of 1963 Act further stipulates that nothing in Section 55 shall be deemed to authorize the University to sell, lease, exchange or otherwise dispose of any land or building of any college or research station transferred to the University under sub- 4 section (1) except with prior concurrence of the State Government.
7. That, as per provisions contained under Section 37 of 1963 Act, the State Government has framed statutes which besides other things provide for staff housing, student hostels and other accommodation vide chapter IX; clause 70 where under stipulates:
“70. Employee Housing and other Accommodations: (1) The Vishwa Vidyalaya may procure, construct, own, take on lease, and use houses for Vishwa Vidyalaya employees as determined by the Board to be necessary for the proper functioning of the Vishwa Vidyalaya. Administrative Council shall make up and adopt Regulations for the proper administration of staff housing matter. (2) As recommended by the Administrative Council the Board may provide and operate for employees of the Vishwa Vidyalaya health, recreational and other ancillary facilities. All Such Facilities shall be administered as provided in regulations prepared and adopted by the Administrative Council.”
. RIVAL CONTENTIONS:
8. Two folds contention have been put forth on behalf of the petitioner, firstly, that, the residential accommodations/ quarters being for the purpose of housing the teachers and others engaged exclusively in furtherance to achieve the object for which the University has been established for which no rent has been charged, except certain charges to 5 meet out the expenses for electricity, water and other amenities, the same is exemptable under section 136(c) of 1956 Act. Secondly, that the property though transferred by the State Government and vest in the University, such vesting, it is urged, is limited to the extent of its being managed and administered to achieve the object for which the University has been constituted i.e. for education and prosecution of research in Agriculture and Allied Sciences, extension and other matters ancillary thereto. It is contended that with the stipulation as contained under sub- section (3) of section 55 of 1963 Act, the State Government has retained its ownership thereon. That being so, it is contended, the buildings and lands owned by the State Government is exempted from imposition of property tax vide clause (a)(ii) of section 136.
9. Respondents on their turn refute the contentions put forth by the petitioner. In respect of the contention that no rent is charged for the accommodation given to the staff, it is urged that the same having not been pleaded should not be taken into consideration as the respondents have already assessed the same being leased out to the tenants, therefore, has been assessed to property tax. It is next urged that, the residential accommodation though occupied by the staff is not exclusively used for educational purpose 6 and since the same is rented out and occupied by tenants, the properties having been assessed to the property tax. Regarding the contention that the ownership of the property transferred and vested with the University is retained by the State Government, it is urged by the learned counsel for respondents that the vesting of property in the University is absolute in nature and the stipulations contained in sub- section (3) of section 55 of 1963 does not curtail the ownership right of the over the property. It is accordingly contended that the property transferred and vested in the University belongs to Petitioner-University and not the State as would attract the exemption clause : section 136(a)(ii).
10. Considered the rival submissions.
11. As the outset it may be noted that though there is no averment in the petition or the rejoinder filed by the petitioner, that no rent is being charged from the staff occupying the residential. The submissions that only charges towards electricity and water supply are recovered from the occupant were made during course of argument. The respondent Corporation has also not come forward with any material on the basis whereof they have ascertained and have arrived at a conclusion that the quarters are occupied by the University staff as tenants and the lease rent is being charged. In absence of any cogent material on 7 record to establish the fact that the employees/teaching staff are occupying the quarters as tenants and the rent is being charged from them, petitioner's contention has to be accepted that no rent is being charged from the employees occupying these quarters, except the electricity, water and charges towards other amenities.
12. Clause (a) of sub-section (1) of section 132 of 1956 Act provides that for the purpose of Act, the Corporation shall subject to any general or special order which the state Government may make in this behalf, impose the whole or in any part of the Municipal area a tax payable by the owners of buildings or lands situated within the city with reference to the gross annual letting value of the buildings or lands called the property tax, subject to the provisions of sections 135, 136 and 138.
13. Section 136 exempts certain class of properties mentioned therein from property tax levied under section 135. Clause (a) provides for buildings and lands owned by or vesting in (i) the Union Government (ii) the State Government (iii) the Corporation; whereas clause (c) provides for buildings and lands or portions thereof used exclusively for educational purposes including schools, boarding houses, hostels and libraries of such buildings and land or portions thereof are either owned by the educational 8 institutions concerned or have been placed at the disposal of such educational institutions without payment of any rent.
14. In the case at hand there is no dispute that the petitioner University has been brought into vogue by virtue of enactment, viz, the Jawaharlal Nehru krishi Vishwa Vidayalaya Act, 1963 with an object to provide for education and prosecution of research in Agriculture and Allied Sciences extension and other matters ancillary thereto. Thus, it is beyond any cavil that it is an educational institution. It is also not in dispute that entire lands and buildings has been transferred by virtue of provisions contained under Section 55 of 1963. That, the college, boarding houses, hostels, libraries are not subjected to Property tax is also not disputed. It is only the staff quarters which are been subjected to property tax on the anvil, as apparent from the assessment order, that, the occupants are tenant. This aspect is seriously disputed by the petitioner that the staff occupying the quarters by virtue of they being employed for imparting education or in furtherance to achieve the object for which the University has been brought in existence.
15. When a staff is engaged to impart education and for that purpose the residential quarters are constructed or 9 taken on lease, as the case may be, to accommodate such staff, then these residential accommodation becomes the integral part of the college with which it is attached. Merely because some amount is charged towards the electricity, water and other amenities, will not entitle the respondents to treat those occupants as tenant in absence of direct evidence of rent being charged from them.
16. In view whereof the respondents are not justified in seggregating the residential quarters occupied by the staff which include the teachers and other employees and by bank and police station for being subjected to property tax. The decision of assessing the residential quarters in question to property tax is set aside and the demand raised thereon vide order dated 24.10.2011 passed by respondent No.1 and the communication dated 04.11.2011 are liable to be quashed.
17. Another issue is whether the property in question is owned by the petitioner-University or the ownership despite of its transfer is refrained by the State.
18. Emphasis has been laid on behalf of University that the property including the land and buildings in the possession is because of the transfer thereof by the State Government vide sub-section(1) of section 55 of 1963 Act. It is urged that though the property as per said provision 10 vests in the University, the vesting is only for the purpose of management and to achieve the object for which the University has been constituted because of the stipulation under Section 55(3) which indicates that the ownership is retained by the State Government.
19. Question is with the vesting of property the University owns the same as its owner.
20. The expression 'vest' takes its meaning from the context.
21. In Fruit and Vegetable Merchants Union v. Delhi Improvement Trust : AIR 195.SC 34.on the question whether vesting of najul land belonging to the Government with the Delhi Improvement Trust under the scheme for construction of markets would create an absolute right. It was held that placing the property at the disposal of the trust did not signify that the Government had divested itself of the title to the property and transferred the same to the Trust. It has been held:
“19. That the word “vest”. is a word of variable import is shown by the provisions of Indian statutes also. For example, S.56 of the Provincial Insolvency Act (5 of 1920) empowers the Court at the time of the making of the order of adjudication or thereafter to appoint a receiver for the property of the insolvent and further provides that “such property shall thereupon vest in such receiver”.. The property vests in the receiver for the purpose of administering the estate of the insolvent for the 11 payment of his debts after realising his assets. The property of the insolvent vests in the receiver not for all purposes but only for the purpose of the Insolvency Act and the receiver has no interest of his won in the property. ON the other hand, Ss.16 and 17 of the Land Acquisition Act (Act 1 of 1894), provide that the property so acquired, upon the happening of certain events, shall “vest absolutely in the Government free from all encumbrances”.. In the case contemplated by Ss. 16 and 17 the property acquired becomes the property of Government without any conditions or limitations either as to title or possession. The legislature has made it clear that the vesting of the property is not for any limited purpose or limited duration. It would thus appear that the word “vest”. has not got a fixed connotation, meaning in all cases that the property is owned by the person or the authority in whom it vests. It may vest in title, or it may vest in possession, or it may vest in a limited sense, as indicated in the context in which it may have been used in a particular piece of legislation. The provisions of the Improvement Act, particularly Ss. 45 to 49 and 54 and 54-A when they speak of a certain building or street or square or other land vesting in a municipality or other local body or in a trust, do not necessarily mean that ownership has passed to any of them.”
22. In Maharaj Singh v. State of Uttar Pradesh & ors : (1977) 1 SCC 15.it has been held:
“16. It is reasonable to harmonize the statutory provisions to reach a solution which will be least incongruous with legal rights we are cognisant of in current jurisprudence. Novelty is not a favoured child of the law. So it is right to fix the estate created by Section 117 into familiar moulds, if any. Such an approach lends to the position that the 12 vesting in the State was absolute but the vesting in the sabha was limited to possession and management subject to divestiture by Government. Is such a construction of 'vesting' in two different senses in the same section, sound?. Yes. It is, but 'vesting' is a word of slippery import and has many meanings. The context controls the text and the purpose and scheme project the particular semantic shade or nuance of meaning. That is why even definition clauses allow themselves to be modified by contextual compulsions. So the sense of the situation suggests that in Section 117(1) of the Act 'vested in the State' carries a plenary connotation, while 'shall vest in the Gaon Sabha' imports a qualified disposition confined to the support is forthcoming, for this meaning. Black's Law Dictionary gives as the sense of 'to vest' as 'to give an immediate fixed right of present or future enjoyment, to clothe with possession, to deliver full possession of land or of an estate, to give seisin'. Webster's Third International Dictionary gives the meaning as 'to give to a person a legally fixed immediate right of present or future enjoyment''.
23. In Vatticherukuru Village Panchayat v. Nori Venkatarama Deekshithulu and others:
1991. Supp(2) SCC 22.it has been held:
“10. The word 'vest' clothes varied colours from the context and situation in which the word came to be used in a statute or rule. In Chamber's Mid-Century Dictionary at p. 1230 defined ''vesting'' in the legal sense 'to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right'. In Black's Law Dictionary, 5th Edition at p. 1401, the word, 'vest', to give an immediate, fixed right of present or future 13 enjoyment, to accure to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff. In Stroud's Judicial Dictionary, 4th Edition, Vol. 5 at p. 2938, the word `vested' was defined in several senses. At p. 2940 in item 12 it is stated thus 'as to the interest acquired by public bodies, created for a particular purpose, in works such as embankments which are vested in them by statue, see Port of London Authority v. Canvey Island Commissioners, [1932]. 1 Ch. 446 in which it was held that the statutory vesting was to construct the sea wall against inundation or damages etc. and did not acquire fee simple. Item 4 at p. 2939, the word `vest', in the absence of a context, is usually taken to mean vest in interest rather than vest in possession'. In item 8 to 'vest',. ''generally means to give the property in''. Thus the word `vest' bears variable colour taking its content from the context in which it came to be used.”
24. In Municipal Corporation of Greater Bombay and others v. Hindustan Petroleum Corporation and another (2001) 8 SCC 14.it has been held:
“15. We are, therefore, of the view that the word “vest”. means vesting in title, vesting in possession on vesting in a limited sense, as indicated in the context in which if is used in a particular provision of the Act.”
25. In Bharat Coking Coal Ltd. v. Karam Chand Thapar & Bros. Pvt. Ltd. and others (2003) 1 SCC 6 it has been held:
14. /p>
“3. The word 'vest' in common English acceptation mean and imply conferment of ownership of properties upon a person and in the similar vein it gives immediate and fixed right of present and future enjoyment. Significantly, however, the expression 'vest' is a word of variable import since it has no fixed connotation and the same has to be understood in different contexts under different set of circumstances. The decision of this Court in The Fruit & Vegitable Merchants Union v. The Delhi Improvement Trust (AIR 195.SC 344.lends concurrence to the same. It is in this context a later decision of this Court (Dr. M. Ismail Faruqui, etc. v. Union of India & Ors. : AIR 199.SC 60.at
645) ought also to be noticed, wherein this Court stated :
"6. (4) The vesting of the said disputed area in the Central Government by virtue of Section 3 of the Act is limited, as a statutory receiver, with the duty for its management and administration according to Section 7 requiring maintenance of status quo herein under sub- section (2) of Section 7 of the Act. The duty of the Central Government as the statutory receiver is to hand over the disputed area in accordance with Section 6 of the Act, in terms of the adjudication made in the suits for implementation of the final decision therein. This is the purpose for which the disputed area has been so acquired. (5) The power of the courts in making further interim orders in the suits is limited to, and circumscribed by, the area outside the ambit of Section 7 of the Act. (6) The vesting of the adjacent area, other than the disputed area, acquired by the Act in the Central Government by virtue of Section 3 of the Act is absolute with the power of management and administration thereof in accordance with sub-section (1) of Section 7 of the Act, till its further vesting in any authority or other body or trustees of any trust in accordance with Section 6 of the Act. The 15 further vesting of the adjacent area, other than the disputed area, in accordance with Section 6 of the Act has to be made at the time and in the manner indicated, in view of the purpose of its acquisition. (7) The meaning of the word "vest" in Section 3 and Section 6 of the Act has to be so understood in the different contexts. (8) Section 8 of the Act is meant for payment of compensation to owners of the property vesting absolutely in the Central Government, the title to which is not in dispute being in excess of the disputed area which alone is the subject matter of the revived suits. It does not apply to the disputed area, title to which has to be adjudicated in the suits and in respect of which the Central Government is merely the statutory receiver as indicated, with the duty to restore it to the owner in terms of the adjudication made in the suits."
26. In the case at hand, the property being transferred by the State Government in favour of the petitioner vide sub- section (1) of Section 55 of 1963 Act is for achieving the object for which the University has been brought into existence. With the transfer of property, the University is placed in possession because as per sub-section (3) of Section 55, it is beyond the power of the University to sell, lease, exchange or otherwise dispose of any land or building of any college or research station without prior concurrence of the State Government. Thus, there is no vesting in title as would create any ownership of property in favour of the petitioner. The ownership continues with the State which leads to a necessary corollary that being a property owned 16 by State, it is exempted from property tax as per section 136(a)(ii) of 1956 Act. For this reason also the respondents are not justified in imposing the impugned property tax.
27. Conclusion, inevitable is, that on both counts i.e. under Section 136(a)(ii) and (c) the respondents cannot levy the property tax on the property of petitioner-University including the residential quarters occupied by the staff, police station, Bank free of rent.
28. Consequently, the assessment of property tax of these accommodations and the demand notice thereon are hereby quashed.
29. Petition is allowed to the extent above. No costs. (SANJAY YADAV) JUDGE anand