COLLECTOR OF BOMBAY versus MUNICIPAL CORPORATION OF THE CITY OF BOMBAY AND OTHERS

Citation: [1952] 1 S.C.R. 43 · Decided: 05-10-1951 · Supreme Court of India · Bench: HARILAL JEKISUNDAS KANIA, M. PATANJALI SASTRI, SUDHI RANJAN DAS, N. CHANDRASEKHARA AIYAR, VIVIAN BOSE · Disposal: Dismissed

Judgment (excerpt)

' 
• 
) 
S.C.R. 
SUPREME COURT REPORTS 
COLLECTOR OF BOMBAY 
v. 
MUNICIPAL CORPORATION OF THE CITY 
OF BOMBAY AND OTHERS . 
. [HARILAL KANIA C.J., PATANJALI SASTRI, DAS, 
CHANDRASEKHARA A1YAR and VIVIAN. BosE JJ.] 
43 
Bombay City Land Revenue Act (II of 1876), s. 8-Resolution of 
Government gr1inting land 
to Corporation free of rent-Statutory 
formalities not complied with-Corporation in possession for over 
70 years and erecting costly structures-Assessment to land revenue 
-Legality-Equitable 
estoppel~Part-performance-Acquisition 
of 
right to exemption from assessment-Prerogative of Crown. 
In 1865, the Government of Bombay called upon the predecessor 
in title of the Corporation of Bombay to 
remove 
some 
markets 
from a certain site and vacat~ it, and on the application of the 
then Municipal Commissioner the Government passed a resolution 
approving and· authorising the grant of another site to the 
Municipality. 
The resolution stated further that "the Gover1i-
ment do not 
consider that any rent should be charged to the 
Municipality as the markets will be, likq other public buildings, 
for the benefit of the whole community." 
The Corporation gave 
:io the sites on which the old markets were situated and spent a 
sum of over 17 lacs in erecting and maintaining markets on 
the 
new site. 
In 1940 the Collector of Bombay, overruling the objec-
tion of the Corporation, assessed the new site under s. 8 of the 
Bombay City Land Revenue Act to !'and revenue rising 
from 
Rs. 7,500 to Rs. 30,000 in 50 years. The Corporation sued for a 
declaration that the order of assessment was ultra vires 
and 
that 
it was entitled to hold the land for ever without payment of any 
assessment. 
The High Court of 
Bombay 
held 
applying 
the 
principle of Ramsden v. Dyson( 1 ) that the Government had lost its 
right to assess the land in question 
by 
reason 
of the 
equity 
arising on the facts of the case in favour of the Corporation and 
there was thus a limitation on the right of the Government to 
assess under s. 8 of the said Act : 
Held per KANIA C. J., 
DAs, 
CHANDRASEKHARA ArYAR and 
BosE JJ. 
(PATANJALI SAsTRr J. dissenting)-that the Government 
was, not under the circumstances of the case\ 
entitled 
to assess 
land revenue on the land in question. 
Per KANIA C. J.; DAs and BosE JJ.-Though there was no 
effectual grant by the Government passing title in the land to 
the Corporation by reason of non-compliance with the 
statutory 
formalities, yet, inasmucli as the Corporation had never-the-less 
taken possession of the land in terms of the Government resolu-
tion and continued in such possession open!~, uninterruptedly 
and 
as of right for over 70 years, the Corporation had acquired the 
(1) (1866) L.R. I H.L. 129. 
1951 
October 5. 
1951 
Collector of 
Bombay 
v. 
44 
SUPREME COURT REPORTS 
[19521 
limited title it had been prescribing for during the period, that 
is to say, the right to hold the land in perpetuity free of rent, 
but only for the purposes of a market and for no other purposes. 
The right acquired included as part of it an immunity from pay-
Municipal Cor-
poration of the 
City of Bombay 
ment of rent which constituted a 
right in limitation of the 
Government's r.ight to assess in excess of the specific limit esta-
blished and preserved by the Government Resolution within 
the 
meaning of s. 8 of the Bombay City Land Revenue Act (II of 
1876) there being for the purposes of ·this case no distinction bet-
and Others. 
weea 
rent 
and revenue. 
Per CHANDRASEKHARA AIYAR J.-If the 
Resolution of 1865 can be read as meaning that the grant was of 
rent-free land the case would come strictly \vithin the doctrine 
-
of estoppel enunciated in s. 115 of the Indian Evidence Act. Even 
otherwise, if there was merely the holding out of a promise that 
no rent will be charged in the future the Government must 
be 
deemed to have bound themselves to fulfil it. 
The right to levy 
assessment is a prerogative right of the 
Government and it is 
hard to conceive of a case where it could be said to be lost by 
adverse possession. 
A 
court 
of equity 
must prevent the per· 
petration of a legal fraud. 
PATANJALI 
SASTRI J. (contra)-The principle of Ramsden v. 
Dyson 
cannot prevail against statutory requirements 
regarding 
disposition of property or making of contracts by 
Government. 
No question of estoppel by representation arises, as the Govern· 
mcnt made no representation of fact which it now seeks to deny. 

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