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 and Anr. : 69 (1997) DLT 749 and Madho Prasad v. Shri Ram Kishan and Ors. 2001 (VII) 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 and Anr. (supra), it has been held that once by virtue of notification issued under Section 507A 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 and 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 and 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 and 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 and 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 and Ors. v. Sh. Lallu Singh and 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 and 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 Corporation Act, 1957, provisions of Delhi Reforms Act will cease to apply. The reference stands answered accordingly. The file be placed before the Acting Chief Justice for sending the same to the learned Single Judge for deciding the case on merits.