P.N. MURTHY AND OTHERS Vs. THE MUNICIPAL CORPORATION OF HYD.
HIGH COURT OF ANDHRA PRADESH
P.N. Murthy And Others
The Municipal Corporation Of Hyd.
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ALLADI KUPPUSWAMI,J. -
(1.) The short question for consideration in this Writ Appeal is whether the buildings in the occupation of the petitioners on which house tax was sought to be levied by the Municipal Corporation of Hyderabad for the period 1-4-61 to 31-3-66 are buildings and lands vesting in the Corporation within the meaning of section 202(1)(c) of the Hyderabad Municipal Corporations Act (II of 1956) (hereinafter referred to as the Act) and are therefore exempt from the general tax leviable in respect of buildings and lands in the city.
(2.) In 1957, the Hyderabad Municipal Corporation (referred to in this judgment as the corporation) started a scheme called the 'low income housing scheme'. In pursuance of that scheme, the Corporation of Hyderabad included the locality called Malakpet. After the construction of the houses at Malakpet was completed, applications were invited for the purpose of allotting these houses. Ultimately, the houses were allotted to the petitioners in the writ petition. Agreements were executed between the allottees and the corporation. According to the agreements the allottees were to pay the sale price in monthly instalments and were allowed to occupy the houses as hire purchasers. The allottees were put in possession of the houses. Clause 4 of the section specifically provides that the house shall remain as the property of the vendor, namely the Corporation and the allottee shall have no right either to sell or to mortgage or otherwise dispose of the same till he has paid the amount in full and obtained the document duly registered in his name at the end of the payment. Even if he paid the balance due and purchased the house outright, the allottee was not entitled to sell the house for five years from the date of the allotment. Under clause (2) the allottee was to pay from the date of allotment Municipal and water taxes and electricity charges to the respective departments.
(3.) It is clear from the terms of the agreement that the houses continue to be the property of the corporation until the entire amount is paid and the property is transferred in favour of the allottees. It is therefore contended on behalf of the allottees that until that date the property must be held to be one vesting in the corporation within the meaning of Section 202(2) of the Act and therefore, no general tax can be levied. On behalf of the corporation it is admitted that the buildings continued to be the property of the corporation as the allottees have not paid the full amount due under the agreement even by the end of the period for which tax is sought to be levied i.e., for the period from 1-4-1961 to 31-3-1966, but it is argued that the mere fact that the property in question continues to be owned by the corporation does not mean that it is vesting in the corporation within the meaning of Section 202(1)(c) of the Act. It is contended that as possession has been given to the allottees and they are in occupation of the buildings the tax was rightly sought to be levied on such buildings and collected from the allottees.;
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