C.Y. Somayajulu, J.
1. Plaintiff in OS No. 6 of 1982 on the file of the Court of the Subordinate Judge, Vizianagaram is the appellant. The suit is filed for a declaration that the respondent (i) is not entitled to collect water tax of Rs. 17,390.08 ps for the year 1981-82 from the appellant and consequently for a direction to return the said amount to it; (ii) cannot assess or impose a tax of Rs. l,919.27 ps on the unauthorized thatched constructions raised by third parties on its land, (iii) enhancing the tax to Rs. 12,716.71 ps on the factory premises and Rs. 7,579.05 ps on the workmen's quarters and bungalows is illegal, void and capricious and consequently (iv) for a consequential permanent injunction restraining the respondent from collecting Rs. 17,390.08 ps as.water tax, Rs. 1,919.27 ps, Rs. 12,716.71 ps and Rs. 7,579.05 respectively as house tax from the plaintiff on the huts, factory premises and workmen's quarters and bungalows, as it is not utilising the water supplied by the defendant, and has its own water supply in its factory and for workmen's quarters etc., in its premises, and as the respondent wrongfully enhanced the tax on the buildings in the premises though no alterations or improvements were made therein. The case of the respondent is that water tax was levied as per the provisions of G.O.Ms.No. 75, PR dated 14-2-1968 in pursuance of the resolution of the Gram Panchayat, after obtaining necessary sanction from the Collector, and that the increase in the tax payable by the appellant was due to the resolution of the Gram Panchayat enhancing the rate of tax from 0.65 ps to 0.80 ps and mat the suit is not maintainable for want of notice under Section 144 of the Gram Panchayat Act, 1964 (the Act). On the pleadings of the parties, as many as 9 issues were settled for trial by the trial Court. In support of its case, appellant examined one witness as PW1 and marked Exs.A1 to A9. In support of its case, respondent examined one witness as DW1 and marked Exs.Bl to B5. The trial Court holding against the appellant on all the issues, dismissed the suit by the decree and judgment under appeal. Hence this appeal by the plaintiff.
2. The points for consideration in the appeal are:
1. Whether the suit is not maintainable for want of notice under Section 144 of the Act?
2. Whether the appellant is entitled to any or all the declarations and consequential reliefs sought?
POINT NO. 1.
3. Section 144 of the Act reads as under:
"144. Notice of action against Gram Panchayat, Nyaya Panchayat, Conciliation Board, etc. :--(1) Subject to the provisions of Section 142, no suit or other legal proceeding shall be brought against any Gram Panchayat, Nyaya Panchayat or conciliation board or the Sarpanch or executing authority, or any member, office or servant of such Gram Panchayat or the Nyaya Adhyaksha or any member of such Nyaya Panchayat or the president or member of any such conciliation board, or against any person acting under the direction of such Gram Panchayat, Nyaya Panchayat, conciliation board, Sarpanch, Nyaya Adhyaksha, present, executive authority, member, officer or servant, in respect of any act done or purporting to be done under this Act or in respect of any alleged neglect or default in the execution of the provisions of this Act or any rule, bye-law, regulation or order made under it, until the expiration of two months next after notice in writing, stating the cause of action, the nature of the relief sought, the amount of compensation claimed and the name and place of residence of the intended plaintiff, has been left at the office of the Gram Panchayat or conciliation board and if the proceeding is intended to be brought against and such Sarpanch, Nyaya Adhyaksha, president, executive authority, member, officer, servant or person, also delivered to him or left at his place of residence, and unless such notice is given the Court shall not entertain such suit or legal proceeding.
(2) Every such proceeding shall, unless it is a proceeding for the recovery of immovable property or for a declaration of title thereto, be commenced within six months after the date on which the cause of action arose in case of a continuing injury or damage, during such continuance or within six months after the ceasing thereof.
(3) If any Gram Panchayat, Nyaya Panchayat, conciliation board or person to whom notice is given under Sub-section (1) tenders amounts to the plaintiff before the proceeding is commenced and if the plaintiff does not in such proceeding recover more than the amount so tendered, they shall not recover any costs incurred by him after such tender, and the plaintiff shall also pay all costs incurred by the defendant after such tender."
4. Learned Counsel for the appellant relying on Bombay Company Limited v. Municipal Council Dindigal, AIR 1929 Madras 146 and Municipal Council, Dindigal v. Bombay Company Limited, AIR 1929 Madras 409, contended that notice under Section 144 of the Act is not mandatory. Municipal Council case ( supra) arises out of the appeal against Bombay Company case (supra). That case arose under Madras District Municipalities Act, 1920. Section 350 of the said Act, which was considered by their Lordships in the said decisions is not in pari-materia with Section 144 of the Act. At page 414 of the judgment in Municipal Council (supra), Section 350 of Madras District Municipalities Act, 1920 (1920 Act, for short) is extracted as follows:--
"According to Section 350, Clause (1):
No suit for damage Decompensation shall be instituted against the Municipal Council. . . in respect of any act done in pursuance or execution or intended execution of this Act or any rule...regulation or order made under it or in respect of any alleged neglect or default in the execution of this Act etc., unless some formalities are complied with and Clause (2) of that Act states:
"Every such suit shall be commenced within six months after the date on which the cause of action arose....."
As seen from the said Section 350 of 1920 Act the embargo is in filing a suit for damages or compensation without notice. Whereas Section 144 of the Act mandates "no suit or legal proceedings shall be brought against a Gram Panchayat". No doubt in middle of Section 144 of the Act the sentence reading "stating the cause of action, nature of relief sought, the amount of compensation claimed and the name and place of residence of intended plaintiff, is mentioned. The need for mentioning the "compensation" in the notice arises only if compensation is claimed. If no compensation is claimed from the Gram Panchayat or Sarpanch etc., there is no need to mention any amount in the notice. A plain reading of Section 144 of the Act clearly shows that if the suit is filed in respect of any act done, or purporting to be done under the Act, or in respect of any alleged neglect or default in execution of provisions of the Act etc., notice has to be issued prior to the filing of the suit. Section 350 of the Madras District Municipalities Act (1920 Act), is very clear and specific. It applies only to suits for damages or compensation for the acts done in pursuance of execution or intended execution of the said Act or the rules made thereunder. So, the above two decisions relied on by the learned Counsel for appellant have no application to the facts of this case.
5. In G. Hamunantha Reddy v. Gram Panchayat, Polkampally Village, 1970 (1) An.WR 26, this Court considered the question whether for instituting a proceeding under Section 22 of the Act, notice under Section 144 of the Act is necessary. At page 28 of the decision the learned Judge held-
"A close and careful reading of Section 144 would leave on one in doubt that the legal proceedings spoken of by that section brought against any Gram Panchayat must relate to any act done or purported to have been done under the Act or must relate to any alleged neglect or default in the execution of the provisions of the Act or any rule, bye-law, regulation or order made under it...... Thus the whole section, if carefully read, would obviously apply only to cases which arise out of actions taken by the Gram Panchavat or the officers mentioned in the said section which give rise to causes of action, whether the reliefs based on such cause of action relate to recovery of immovable property, declaration of title or the payment of compensation. It is to such types of cases that Section 144 of the Act applies. In my opinion, it does not apply to a legal proceeding initiated by a member of the Gram Panchayat to get a decision on his alleged disqualification." (underlining mine)
In that case a Member of the Gram Panhayat allegedly was in default in payment of profession tax of Rs. 6/- inspite of notice of demand being served on him. The question was whether he incurred a disqualification under Section 20(j) of the Act. Contending that since he already paid the profession tax for the period in question and sent a reply to the Gram Panchayat to that effect, he initiated proceedings under Section 22 of the Act before the Munsif Magistrate, Malwakurthy, with a view to get a confirmation from the Court that he did not incur any disqualification. The Court dismissed the petition in limine on the ground that no notice under Section 144 was given to the Gram Panchayat before initiation of the legal proceedings. When such dismissal was challenged in the above case the learned Judge held that initiation of a proceedings by a member under Section 22 of the Act to get a decision on his alleged disqualification cannot be said to be a legal proceeding against a Gram Panchayat or any one of its officers mentioned in Section 144, and as such proceedings does not relate to any act done, or purported to have been done under the Act in respect of any alleged neglect or default in execution of the provisions of the Act or rules made thereunder, notice under Section 144 of the Act is not necessary. Since the case of the appellant is that the respondent in gross violation of the provisions of the Act issued the demand notice and collected the tax, and filed the suit for recovery of the amount collected and is seeking an injunction from the respondent collecting the tax, it is clear that the appellant is questioning an act done by the respondent under the provisions of the Act. Therefore, notice under Section 144 of the Act is necessary.
6. G. Bheema Rao v. J. Laxmipati, 1983 (1) ALT (NRC) 37, also does not help the contention of the learned Counsel for the appellant. The facts of that case show that Sarpanch of a Gram Panchayat unsupported by a resolution of the Gram Panchayat, filed complaint against the plaintiff in a criminal Court. After acquittal by the criminal Court, plaintiff filed a suit for damages against the Sarpanch in his individual capacity for damages for malicious prosecution which was decreed. When that decree is challenged in this Court on the ground that the suit is not maintainable for notice under Section 144 of the Act, this Court confirming the decree of the trial Court held that since the complaint was filed by the Sarpanch, without any resolution from the Gram Panchayat, it is a complaint filed by the Sarpanch in his individual capacity, but not in his capacity as the Sarpanch and so Section 144 of the Act would not apply.
7. Therefore, it is clear that if a suit or legal proceedings is to be instituted questioning the acts done or purported to be done under the Act, or in respect of any alleged neglect, or default in execution of the provisions of the Act, rules, bye-laws, regulations etc., made thereunder, notice as contemplated by Section 144 of the Act is necessary. In this case since notice under Section 144 of the Act, admittedly was not given to the respondent the suit is not maintainable. The point is answered accordingly.
POINT NO. 2:
8. In view of my finding on point No. 1 it is really not necessary to answer this point. But since I heard the learned Counsel for the parties on this point also it is but fair that I should give a finding on all the contentions raised before me in respect of this point also.
The first relief is sought in respect of collection of Rs. 17,390.08 ps as water tax for the year 1981-82 and for return of the said amount. The contention of the appellant is that since appellant has its own water supply scheme, and is not utilizing any water from the respondent Gram Panchayat, it is not liable to pay water tax. The contention of the respondent Gram Panchayat is that though the levy is termed as a 'water tax', in fact it is not a water tax but a special tax levied as per of G.O.Ms.No. 75, Panchayat Raj, dated 14-2-1968.
9. Section 75 of the Act, empowers the Gram Panchayat to levy a special tax on houses at such rate, as may be prescribed, to provide for expenses in connection with the construction, maintenance, repair, extension and improvement of water or drainage works or the lighting of the public streets and public places and other similar works. By virtue of the power conferred thereunder, read with Section 70 of the Act, in G.O.Ms.No. 75, PR., dated 14-2-1968 rules are framed by the Government, specifying the maximum and minimum rates that can be levied in Rule 2. Rules 4 and 5 lay down that after the proposal is made by a resolution in a meeting specially convened for the purpose, supported by not less than half of the sanctioned strength of the Gram Panchayat, specifying the purpose and the rate at which and the period for which tax is levied, is sent by the Gram Panchayat, the Collector, after considering the suitability or otherwise of the rate of tax proposed, has power to sanction the levy. As per Rule 8 thereof no separate demand need be issued, and it would be enough if the taxes are incorporated in the demand notice for house tax indicating each tax separately on the back of it.
10. The evidence of DW1 read with Exs.B1 and B2, shows that in pursuance of the resolution passed by the respondent Gram Panchayat, Collector accorded sanction for levy of the special tax. Therefore it is clear that respondent levied water tax after complying with the provisions of the Act and rules made thereunder. Therefore, the contention of the appellant that levy and collection of water tax from it is illegal cannot be accepted. Moreover, as per Sub-section (2) of Section 151 of the Act a suit for recovery of any sum of money collected under the authority of the Act can be brought only if the provisions of the Act have been in subsistence and effect are not complied with. Since Exs.B1 and B2 and the evidence of DW1 show mat water tax of Rs. 17,390.08 ps was collected after complying with the provisions of the Act and the rules in effect and substance, appellant is not entitled to file the suit for refund of the amount collected from it So, appellant is not entitled to the relief of declaration, or for refund of the amount of Rs. 17,390.08 ps as sought.
11. The next relief claimed relates to imposition of Rs. 1,919.20 ps as house tax on the thatched constructions. The contention of the appellant is that the thatched sheds were constructed by third parties on its site, and when the respondent issued a notice for removal of those structures unauthorisedly constructed, it sent a reply that it has no objection for removal of the said structures, and since it did not construct the huts, the respondent cannot impose or collect house tax on the huts from it.
12. Ex.A3 is the notice issued by the respondent to the appellant to show-cause why action should not be taken for the construction of thatched sheds in its premises. Ex.A4 is the office copy of the reply to Ex.A3, in which appellant clearly stated that since it did not construct the thatched sheds, question of its obtaining permission does not arise, and that respondent is at liberty to demolish the constructions immediately. Therefore, it is clear that appellant is not the owner of the huts, which are unauthorized construction. After having issued show-cause notice as to why the unauthorized huts cannot be demolished, and when the appellant sent a reply that it did not make the construction and has no objection for the respondent demolishing the said unauthorized structures respondent instead of removing the unauthorized structures as proposed, levying tax on the appellant who is not the owner of the huts, cannot but be said to be irregular, if not illegal. Therefore, the appellant would have been entitled to the declaration that the respondent levying and demanding tax in respect of the huts not constructed by it, is improper and also the consequential injunction restraining the respondent from collecting the tax thereon from it, if it had issued notice under Section 144 of the Act prior to the filing of the suit. But, since notice under Section 144 of the Act was not issued appellant is not entitled to the relief of declaration and injunction in respect of imposition of Rs. 1,919-27ps on the thatched structure in its site.
13. The third relief sought by the appellant is with regard to the enhancement of tax on the factory premises and, workmens' quarters and bungalows, etc., on the ground that such enhancement is not warranted because no alteration or additions or improvement were made. The case of the respondent, is that by its resolution dated 31-7-1981 the rate of tax was enhanced from Rs. 0-65 ps to Rs. 0-80 ps per hundred rupees, on the capital value of the buildings, and that there were alterations and additions in the buildings of the appellant.
14. The evidence of DW1, the Revision Officer of Nellimarla Panchayat, is that at the time of his inspection of the premises of the appellant he found that there is a change in the nature of use of some of the buildings which were exempted in 1975-76, and so they also were assessed to tax during 1981-82, and as the building which was used as a school during 1975-76 was being used as a residential premises at the time of inspection, and a workers shed was converted into staff quarters, and a generator building was newly built, rest room and cycle sheds were converted into godowns and water house was extended, four oil tanks and two jute godowns and urinals were newly constructed in the mill premises and Balavadi Centre was converted into the office of the Chief Labour Officer, and two godowns, which were previously assessed as a part of bungalow were separately assessed to tax during revision, there is an enhancement in the tax. During cross-examination he stated that he recorded the special reasons for enhancement of tax, but did not communicate those reasons to the appellant. Though PW1 denied construction of new buildings, installation of a generator, in his chief-examination, he admitted extension of Warehouse and construction of four underground oil tanks and building of two jute godowns behind the existing godowns and also admitted that a Creache was converted into Labour Office Centre. He pleaded ignorance of construction of new urinals. Thus even from the evidence of PW1 it is seen that some new constructions came up in the premises of the appellant.
15. Since respondent has power to levy tax on the basis of capital value, and enhance the rate of levy and had enhanced the rate of tax by way of a resolution dated 31-7-1981, as seen from Ex.B4 and since some new structure came into existence in the premises of the appellant, and since DW1 who was appointed as Special Officer to revise of house tax has power under Rule 13 of Part I of Chapter IV of Schedule II Act to fix the amount of house tax payable by the appellant as per Exs.B4 resolution, it cannot be said that the enhancement is not in accordance with the provisions of the Act. Unless it is established that the enhancement was not made in accordance with the provisions of the Act, and that the provisions of the Act have not been complied within effect and in substance, appellant cannot be granted the relief in respect of enhancement of tax and the factory premises and quarter. Since, appellant did not so establish, it is not entitled to declarations and consequential reliefs sought in respect of enhancement of tax and the factory premises and quarters, etc. Thus, appellant is not entitled to any of the declarations and consequential reliefs sought. The point is answered accordingly.
16. In view of my findings on points 1 and 2, the appeal is liable to be dismissed and it is accordingly dismissed with costs.