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Sunday, Dec 15, 2019

Bombay HC strikes down 2001 PMC circular levying higher fees for effecting changes in record of rights

mumbai Updated: Nov 13, 2019 16:24 IST
Kanchan Chaudhari
Kanchan Chaudhari

The Bombay High Court on Tuesday struck down a February 2001 circular issued by the Pune Municipal Corporation (PMC) related to effecting changes in the record of rights.

Mumbai resident Shanmugam Chettiyar had approached the high court challenging the February 2, 2001, resolution passed by the PMC under which the civic body decided to levy and collect higher fees for effecting changes in the record of rights of immovable properties.

The resolution did away with a fixed fee for mutation entries and instead introduced a regime of ad valorem charges based on rateable value of the immovable property. The civic body had also enhanced the rate at which the charges were being levied from time to time.

Chettiyar had received, by succession, nine units (immovable properties) at an industrial estate at Mundhwa in Pune, and had applied for getting his name entered in the record of rights of the properties. The municipal corporation had demanded total amount of Rs 4.50 lakh, charging Rs 50,000 for effecting change in the record of rights of each of the properties.

Chettiyar took strong objection to the demand. He contended that under the guise of collecting fees, the municipal corporation could not extract tax computed on the basis of rateable value of the property in question.

His lawyer, advocate RD Soni, further pointed out that the charges levied by the civic body for making mutation entries, being in the nature of fees, should be commensurate to the services rendered. “Collecting said charges at the ad valorem rate gives it the character of tax and demanding the same is, therefore, without authority of law,” Soni had argued.

The lawyer had also pointed out a Supreme Court ruling in the case of Calcutta Municipal Corporation in support of his contention.

The civic body opposed the petition contending that it had statutory authority to collect appropriate fees for maintaining the property records and for making necessary changes in the record of rights of immovable properties and cited certain provisions in the Maharashtra Regional and Town Planning Act.

The bench of justice Akil Kureshi and justice BP Colabawalla, however, struck down the February 2001 PMC resolution in view of the Supreme Court’s verdict in Calcutta Municipal Corporation case, in which the apex court had held that the civic body had no authority to levy fees on the basis of rateable value of properties for effecting changes in the record of rights.

The bench also clarified that the civic body was free to fix appropriate “fee” for making mutation entries and directed it to decide applications filed by the petitioner on payment of fees at rates prevailing before introduction of the February 2001 resolution.