HOUSING AND URBAN DEVELOPMENT CORPORATION LTD. versus M.C.D AND ANR.

Citation: [2000] SUPP. 5 S.C.R. 666 · Decided: 13-12-2000 · Supreme Court of India · Bench: B.N. KIRPAL, U.C. BANERJEE, BRIJESH KUMAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
HOUSING AND URBAN DEVELOPMENT 
CORPORATION LTD. 
M.<:;.D. AND ANR. 
DECEMBER 13, 2000 
[B.N. KIRPAL, U.C. BANERJEE AND BRIJESH KUMAR, JJ.] 
Municipalities: 
Delhi Municipal Corporation Act, 1957: 
Ss. 119 and l 20(i)-Property tax-Land belonging to Union of India-
Given to Housing and Urban Development Corporation on l. l l.1990-Lease 
deed er:ecuted on 4. 7.1997-Municipal Corporation making assessment for 
D the period 2.7.1990 to 31.3.1995-Held, land being the property of Union 
of India and as such exempt from tax by virtue of s. 119(/)-Even uls 120(/) 
no tax would have been levied on Housing Corporation in respect of the said 
land prior to the same being let out in 1997-Expression "'any other person" 
u!s 119(2) would refer only to that person to whom possession uls 20 of 
Displaced Persons (Compensation and Rehabilitation) Act has been 
E delivered-Words and Phrases. 
F 
G 
H 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6645 of I 999. 
From the Judgment and Order dated 31.8.1999 of the Delhi High Court 
in C.W.P. No 3179of1994. 
Harish N. Salve, Solicitor General, C. Mukhopadhaya, Manish Kumar 
and V. Krishna Murthy for the Appellant. 
M.L. Varma, Sr. Adv., Ms. Arnita Gupta and Dhananjay Kumar Singh for 
the Respondents. 
The following Order of the Court was delivered : 
On !st November, 1990, 42.6 acres of Government land at Andrews Ganj, 
Delhi was given by the Government of India to the appellant for development. 
According to the terms of the allotment letter, 17 .6 acres of land was to be 
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HOUSING AND URBAN DEVELOPMENT CORPN. LTD. v. M.C.D 
667 
developed by the appellant and utilised as a hostel and guest house facilities, A 
conference hall, shopping and other community centre facilities. Out of the 
money earned therefrom, on 25 acres of land flats were to be constructed for 
housing Government servants. The said letter envisaged that a lease to this 
effect would be executed in future. 
Possession was taken and on 25th March, 1994. even though formal B 
lease had not been executed in favour of the appellant, assessment under the 
provisions of the Delhi Municipal Corporation Act, 1957 (for short "the Act") 
was made to property tax for the period 2nd July, 1990 to 31st March 1995. 
The assessment was made at the rate of 5 per cent of the value of the land. 
The assessment was on the vacant land as no building as on that day had C 
yet been erected. 
The challenge of the appellant to the said levy based on the provisions 
of Section 119 of the Act did not succeed. It was the contention of the 
appellant that the land in question belonged to the Central Government and 
by virtue of the sub-section (1) of Section 119 no tax thereof could be levied. D 
Having failed in the High Court, the present appeal by special leave has been 
filed. 
Learned Solicitor General for the appellant submits, as had been 
contended earlier, that under Section 119(1) the lands and buildings being the 
properties of the Union are exempt from tax. He submits that the provisions E 
of sub-section (2) of Section 120 did not come into play because a formal 
lease deed was executed in favour of the appellant by the Central Government 
only on 4th July, 1997 and it is only thereafter that the interest in the land 
could be said to have passed on to the appellant. He further submits that 
even under Section 120(1) the property tax is primarily leviable if the land is F 
let upon the lessor, if it is sublet upon the superior lessor and if it is unlet 
then upon the person. In whom the right to let the same vests. He submits 
that admittedly no lease deed has been executed during the period 2nd July, 
1990 to 31st March, 1995 and, therefore, the land was unlet. He then contends 
that the right to let this land still vested with the Central Government and did 
not vest at that point of time with the appellant, for no right under a lease G 
to that effect had been created. 
Section 119 on which reliance is placed reads as follows: 
"119. Taxation of Union properties---( I) Notwithstanding anything 
contained in the foregoing provisions of this Chapter, lands and H 
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SUPREME COURT REPORTS [2000) SUPP. 5 S.C.R. 
buildings being properties of the Union shall be exempt from the 
property taxes specified in section 114: 
Provided that nothing in this sub-section shall prevent the 
Corporation from levying any of the said taxes on such lands and 
buildings to which immediately before the 26th January, 1950, 

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