Raju, J. - (1.) The appellants, who had lost before the High Court, filed this appeal against the judgment of the Delhi High Court dated 14-7-97 in CWP No. 2349 of 1995 since reported in AIR 1997 Delhi 347, whereunder the challenge made by the appellants to a demand raised by the respondent to the tune of Rs. 4,37,56,295.90 on account of property-tax for the period from 1-4-69 to 31-3-95 in their house-tax bill dated 24-11-94, notice of demand dated 31-3-95 and a letter dated 13-6-95 came to be rejected. Having regard to the nature of issues raised, certain factual details need elaborate reference to properly deal with and appreciate the same. The Delhi Golf Club Limited (hereinafter referred to as the "Club") is a limited company incorporated under the Companies Act, 1956 with the object of promoting the game of Golf and for that purpose provide courses and grounds at New Delhi or elsewhere in the State of Delhi, to lay out and also maintain the same by providing club houses, pavilions, lavatories, kitchens, refreshment rooms, workshops, sheds and other conveniences for the use of its members and other persons either gratuitously or on payment of charges. The land measuring 183 acres situate in Wellesley Road, New Delhi, was being used by the New Delhi Municipal Committee (hereinafter referred to as the "Municipal Committee") for running a Golf Course till 1950 and in the year 1950, the Municipal Committee handed over the said Golf Course to the Club. In the year 1952, a lease deed dated 10-12-52 was executed between the Municipal Committee and the Club under which the land together with old buildings existing thereon known as Golf Club with a plinth area of 3000 sq. feet and a new building identified as Office with plinth area of 450 sq. feet was granted on lease on an annual rent of Rs. 200/- for land and Rs. 50/- as rent for the old buildings and another Rs. 50/- as rent for the new buildings. Due to some development and turn of events in the Ministry of Works Housing and Supply, Land and Development Office, Government of India, New Delhi, the entire property, noticed above, was taken over by the Central Government on payment of a sum of Rs. 25,000/- as compensation for tools and plants as evidenced by a letter dated 19-12-63. Simultaneously, the Land and Development Office by its letter dated 19-12-63 informed the Club about the said taking over and called upon them to pay a sum of Rs. 25,000/- by means of a cheque towards the compensation for the tools and plants etc., which were in possession and use of the Club. The Club has been making representations for grant of a regular lease of the land and the buildings or the superstructure standing thereon. Though, no formal lease deed as such was executed, the Government of India, Ministry of Works Housing and Supply, Land and Development Office, vide its letter dated 23-4-68 communicated the sanction of the President of India for the temporary allotment for the period up to 1980 of land measuring about 180 acres for the use of the Club on the terms and conditions set out therein. The Club was obliged to use the land and buildings for the bona fide purposes of the Golf Club and for no other purpose and was further obligated to pay rent from 8-11-63 at the rates more fully set out therein. A restriction on any further construction without the prior permission of the Government and without obtaining the prior approval of building plans from the Local Body as well as the Land and Development Officer was also imposed. All the trees standing on the land were declared to be the Government property which are not to be cut or removed without the prior approval of the Government. The lease was also stated to be a temporary one terminable within one month notice from either side, with an obligation to the Club, in case of such termination to restore and surrender possession. Certain other conditions regarding the manner of maintenance of the properties were also imposed and it is unnecessary to dwell at length on those conditions. The Club made the necessary payment as required in the letter dated 23-4-68.
(2.) While matters stood thus, the Municipal Committee served a notice dated 13-2-69 purporting to assess the property in the hands of the Club and proposed to assess the house/property tax under Section 65 of the Punjab Municipal Act, 1911 (hereinafter referred to as the "Act") in relation to the Golf area (open land) and the building standing thereon at the annual value of Rs. 1,32,83,357.71. As required in the notice, the Club, though felt surprised, filed its objections contending that the proposed assessment was wrong, illegal, ultra vires and without jurisdiction since the Club was neither the owner nor a permanent lessee of the property in question to attract liability under Section 61 of the Act and that, in any event, the valuation was also arbitrary and based on merely surmises and conjectures. The purpose and objects of the Club which was meant for the development and protection of the game of Golf and the fact that it is a non-profit making enterprise, was also duly highlighted. Though an opportunity to make personal representation was also granted in the notice, counsel deputed along with the Accountant was said to have been not allowed to state anything, making the entire exercise a mere pretence. Thereupon, vide a letter dated 3-5-69, the Club was informed that the assessment has been finally settled and confirmed with an annual value of Rs. 1,32,83,357.70 with effect from 1-4-69 vide Resolution No. 19 (156) of the Ordinary Meeting of the Committee said to have been held on 26-3-69. On the service of the said proceedings on the Club on 5-5-69, an appeal was filed. In the meantime, on 8-10-69 a notice came to be issued calling upon the payment of Rs. 16,60,420.68 as house tax for the period from 1-4-69 to 31-3-70 within 7 days from receipt of the notice on threat of action under Section 80(3) of the Act. While repudiating the said claims and demands through its counsel on 23-10-89, and faced with the threat of recovery proceedings by the Authorities of the Municipal Committee, the Club filed two Suits Nos. 419/69 and 367/70 in the Court of Subordinate Judge, 1st Class, Delhi, in respect of the assessment years 1969-70 and 1970-71 seeking for permanent injunction restraining the Municipal Committee from realisation, demand or recovery of any amount as house-tax from the plaintiffs and/or enforcing the demands made as noticed above and/or from taking coercive measures for the realisation of the said amount in any manner. By judgment and decree dated 27-4-73, the suits were decreed as prayed for and it was held by the learned Judge that the Club had only a temporary lease of the property and, therefore, was not liable to be assessed to tax under Section 61 of the Act, that the suit was not barred under Section 86 of the Act and that the assessment was also not in conformity with Section 3(1) of the Act. Aggrieved, the Municipal Committee pursued the matter on appeal before the District Court in RCA No. 129/76 and 130/76. The learned First Appellate Judge also concurred with the judgment and decree of the trial Court and the appeals came to be dismissed on 5-3-77. Though the matter was further pursued before the High Court on second appeal in RSA Nos. 206 and 207/77, the appeals came to be dismissed as withdrawn on 30-8-1985. An application filed seeking for review in CM No.1250/85 also came to be dismissed on 20-9-85.
(3.) Thereafter, the matter was under suspense for some time so far as the parties are concerned. Meanwhile, the Government of India, Ministry of Urban Development, Land and Development Office, by its proceedings dated 20-7-94 communicated its decision to allow the Club to use the land measuring about 179 acres beyond 31-12-90 for 20 years, i.e. from 1-1-1991 to 31-12-2010, subject to the terms and conditions more fully set out therein, of which the following may be mentioned as relevant and necessary for the purposes of this case :- "I. The period of temporary lease will be for a period of 20 years, i.e., from 1-1-1991 to 31-12-2010. II. (i) The Delhi Golf Club shall be required to pay annual ground rent for 2.08 acres or area required as per building bye-laws for the covered area @ 5% of Rs. 39 lakhs per acre. (ii) The Club shall pay the Licence Fee @ Rs. 1,000/- per acre for the green area measuring 176.92 acres. (iii) There will be complete ban of construction on green areas and prior permission of the Government would be necessary for any construction on 2.08 acres. (iv) The Delhi Golf Club shall pay the property tax/service charges or any other taxes demanded by local bodies to pay the Government equivalent amount (in case Government is billed by local bodies) for the entire land under their occupation. Though the property taxes for the period prior to 1-1-91 does not form part of the Current Lease Agreement, the Club shall, however, settle all issues pertaining to outstanding property tax etc. with NDMC as communicated to them vide their office letter dated 26-4-1999 and make necessary payments to NDMC in this regard. Their will be no liability in Government of India whatsoever towards property tax. III. The land shall be used for its bona fide activities of promoting the sport of Golf. In the light of the above position, you are required to pay the following dues to this office on account of licence fee, ground rent etc. for the period from 1-1-91 to 31-12-1995. A. Ground rent of area 2.08 acres @ Rs. 4,05,600/- P.A. w.e.f. 1-1-91 to 31-12-95 Rs. 20,28,000.00 B. Licence fees of area 176.92 acres @ Rs. 1,76,920/- P.A. w.e.f. 1-1-91 to 31-12-95 Rs. 8,94,600.00 2. The Government shall reserve its right either to cancel the lease for the green area or terminate the lease for the covered area or both by giving six months' notice in case it is decided to put the land to alternative use for a public purpose. 4. If the terms and conditions referred to above are acceptable, acceptance thereof along with the payment of above dues may be sent to this office within 30 days from the date of receipt of this letter failing which the terms communicated to you for the extension of temporary allotment will be withdrawn and cancelled without any further notice to you." ;