Cochin International Airport Ltd. v. The Secretary, Greater Cochin Development Authority and The Secretary, Corporation of Kochi

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: A.K. Jayasankaran Nambiar
Judgment Date: 2016-05-24
Court Decision / Holding: Writ petitions allowed; Exts. P1, P3 and P5 of WP(33958/2011) and Exts. P1, P3, P4 of WP(5960/2012) are quashed to the extent impugned; petitions allowed with consequential reliefs.
Final Disposition: Writ petitions allowed; notices challenged for earlier periods quashed; consequential reliefs granted to petitioner.

Parties to the Case

Appellants / Petitioners

Cochin International Airport Limited

Respondents

The Secretary, Greater Cochin Development Authority
The Secretary, Corporation of Kochi

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Pathrose Matthai (Sr.)
• Sri. Saji Varghese
• Smt. Mariam Mathai

Counsels for Respondents

• Sri. M.K. Thankappan, SC, GCDA
• Sri. V.S. Sreejith, SC, Kochin Corporation
• Sri. P.K. Soyuz, SC, Kochin Corporation
• Smt K.K. Raziya, SC, Kochin Corporation

Case Synopsis & Summary

Two writ petitions by Cochin International Airport Limited challenged property tax demands raised by the Greater Cochin Development Authority (GCDA) and the Kochi Corporation for buildings leased to CIAPL. Under the lease agreement, CIAPL was obliged to discharge the property tax payable to the Kochi Corporation (the 2nd respondent) on a yearly basis. Due to a misunderstanding, CIAPL did not pay the tax to the 2nd respondent for 1992-1993 to 2012. The 2nd respondent issued recovery actions, followed by demands from the 1st respondent (GCDA) to CIAPL, seeking tax for the same period. In WP 33958/2011 the demand runs from 1992-1993 to 2012; in WP 5960/2012 it runs from 1992-1993 to 2011-2012. CIAPL contends that it occupied the buildings only until 1999, so demands for 1999 onwards are invalid since there was no occupancy, and that demands for 1992-1999 are barred by limitation. The court held that the period 1992-1993 to 2008-2009 was undisputedly due but unpaid, and that the recovery notices for more than three years prior to the 2011 notices were barred by limitation. It relied on State of Kerala v. V.R.Kalyanikutty (AIR 1999 SC 1305) to support limitation. Consequently, Exts. P1, P3, P5 in WP33958/2011 and Exts. P1, P3, P4 in WP5960/2012 were quashed to the extent challenged, and the petitions were allowed with consequential reliefs.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners contend that the property tax demands for the periods 1992-1993 to 1999 and 2009-2012 are improper: CIAPL occupied the premises only until 1999, so demands post-1999 are invalid for lack of occupancy; demands for 1992-1999 are barred by limitation since the breaches occurred year by year. Since the agreement imposes yearly tax liability, the limitation period should run from each year's breach, and the 2011 notices rely on pre-2009 periods, which are time-barred. They rely on the Supreme Court’s decision in State of Kerala v. V.R.Kalyanikutty (AIR 1999 SC 1305).

Contentions of Respondents

The respondents contend that CIAPL’s default in paying property tax to the 2nd respondent triggered the liability, and the agreement empowered the 1st respondent to demand and recover; the limitation period should be computed from each year's breach, so older demands may still be actionable if timely; the authorities argue that the defaults continued and the 3-year limitation governs recovery actions for each year's dues.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
State of Kerala v. V.R.Kalyanikutty	AIR 1999 SC 1305	Positive	Cited as authority to support that the demands for tax dues prior to the recovery notice are barred by the provisions of limitation; the court uses this to justify quashing the challenged notices for earlier periods.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** **TUESDAY, THE 24TH DAY OF MAY 2016/3RD JYAISHTA, 1938** **WP(C).NO. 33958 OF 2011 (T) ----------------------------** **PETITIONER(S): -------------** **COCHIN INTERNATIONAL AIRPORT LTD., 35,GCDA COMPLEX,MARINE DRIVE,KOCHI-682031., REPRESENTED BY ITS EXECUTIVE DIRECTOR(FINANCE)& COMPANY SECRETARY.** **BY ADVS.SRI.M.PATHROSE MATTHAI (SR.) SRI.SAJI VARGHESE SMT.MARIAM MATHAI** **RESPONDENT(S):** **--------------** **1. THE SECRETARY,GREATER COCHIN DEVELOPMENT AUTHORITY,P.B.NO.2012,KOCHI-682020.** **2. THE SECRETARY,CORPORATION OF KOCHI, PARK AVENUE,KOCHI-682031.** **R2 BY ADV. SRI.V.S.SREEJITH,SC,COCHIN CORPORATION R1 BY ADV. SRI.M.K.THANKAPPAN, SC, GCDA BY SRI.M.K.THANKAPPAN, SC, GCDA BY SRI.P.K.SOYUZ,SC,COCHIN CORPORATION** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-05-2016, ALONG WITH WPC. 5960/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).NO. 33958 OF 2011 (T)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1: TRUE COPY OF NOTICE DATED 1.8.2011 ISSUED BY THE 1[ST] RESPONDENT** **EXT.P2: TRUE COPY OF LETTER DATED 4.8.2011 FROM THE PETITIONER TO THE 1[ST] RESPONDENT** **EXT.P3: TRUE COPY OF LETTER DATED 7.10.2011 BY THE 1[ST] RESPONDENT TO THE PETITIONER** **EXT.P4: TRUE COPY OF THE LETTER DATED 21.10.2011 FROM THE PETITIONER TO THE 1[ST] RESPONDENT** **EXT.P5: TRUE COPY OF NOTICE DATED 4.11.2011 BY THE 1ST RESPONDENT TO THE PETITIONER** ## **RESPONDENTS' EXHIBITS: NIL** **//TRUE COPY//** **P A TO JUDGE** ## **A.K.JAYASANKARAN NAMBIAR, J.** **............................................................. W.P.(C).No.33958 of 2011 & W.P.(C).No.5960 of 2012 ............................................................. Dated this the 24[th] day of May, 2016** ## **J U D G M E N T** Since the issue involved in both these writ petitions is the same they are taken up for consideration together and disposed by this common judgment. For the sake of convenience, the reference to the facts and the exhibits is from W.P.(C).No.33958 of 2011. 2. The petitioner in both the writ petitions is the Cochin International Airport Limited, which had taken on rent buildings from the 1[st] respondent. As per the terms of the agreement entered into between the petitioner and the 1[st] respondent in connection with the renting of the buildings, the petitioner was obliged to discharge the property tax liability in respect of the building to the 2[nd] respondent Corporation on a yearly basis. The facts in the writ petition would disclose that, on account of a misunderstanding, the petitioner did not pay the property tax amount on behalf of the 1[st] respondent to the 2[nd] respondent Corporation for the period from -2- ## **W.P.(C).No.33958 of 2011 & W.P.(C).No.5960 of 2012** 1992-1993 to 2012. Subsequently, the 2[nd] respondent Corporation appears to have proceeded against the 1[st] respondent in respect of the property tax due in respect of the buildings that were leased out to the petitioner. When a notice was received by them in 2011, the 1[st] respondent issued a notice to the petitioner calling its attention to the notice received by the 1[st] respondent from the 2[nd] respondent and directing the petitioner to comply with its obligations under the agreement entered into with the 1[st] respondent, and to pay tax that was demanded from the 1[st] respondent by the 2[nd] respondent. On receipt of the notices from the Corporation and when faced with recovery action for recovery of the said amount, the petitioner approached this Court through the present writ petition. In W.P.(C).No.33958 of 2011, the demand of property tax is for the period from 1992-1993 to 2012. The petitioner would contend that he had occupied the buildings in question only till 1999, and hence, the demand of property tax for the period subsequent to 1999 is at any rate, illegal since there was no building occupied by the petitioner during the period subsequent to 1999. As regards the period from 1992-1993 to 1999, it is the case of the petitioner that the demand made against the petitioner for the said period is barred by limitation. Similarly -3- ## **W.P.(C).No.33958 of 2011 & W.P.(C).No.5960 of 2012** in W.P.(C).No.5960 of 2012, the demand against the petitioner is for the period from 1992-1993 to 2011-2012. In respect of the buildings covered by this writ petition, it is not in dispute that the petitioner still continues to occupy the buildings in question and in the writ petition what is assailed is only the demand to the extent it pertains to the period prior to 2009-2010, in otherwords, the demand for the period from 1992-1993 to 2008-2009. It is submitted on behalf of the petitioner that for the period after and including 2009-2010 he has no dispute and he is paying the property tax to the 1[st] respondent and in turn to the 2[nd] respondent. 3. I have heard Sri.Saji Varghese , the learned counsel for the petitioner in both the writ petitions, Sri.M.K.Thankappan, the learned Standing counsel for the 1[st] respondent in W.P.(C). No.33958 of 2011 and Smt.K.K.Raziya, the learned Standing counsel for the 1[st] respondent in W.P.(C).No.5960 of 2012. 4. On a consideration of the facts and circumstances of the case and the submissions made across the bar, I find that for the period from 1992-1993 to 2008-2009 both inclusive, it is not in -4- ## **W.P.(C).No.33958 of 2011 & W.P.(C).No.5960 of 2012** dispute that the property tax that was due to the 2[nd] respondent Corporation, in respect of the buildings that were leased out by the 1[st] respondent to the petitioner, was not paid to the respondent Corporation either by the petitioner or by the 1[st] respondent. The 2[nd] respondent Corporation, therefore, raised a demand on the 1[st] respondent in the year 2011 and in turn the 1[st] respondent, placing reliance on the agreement entered into with the petitioner issued a demand in a like sum to the petitioner towards liability for property tax. It is apparent that both the demands, inasmuch as they pertain to a period more than three years prior to the date of the recovery notice, are barred by limitation. Although, it is vehemently contended by learned counsel for the 1[st] respondent that, the fact of non-payment by the petitioner of property tax to the 2[nd] respondent Corporation, came to its notice only when it received a notice from the 2[nd] respondent Corporation in the year 2011, the fact remains that, if the 1[st] respondent is relying on the terms of the agreement entered into with the petitioner for justifying the demand, then they ought to have raised the demand within a period of three years from the date of breach by the petitioner of the terms of the agreement. When viewed in that context, it is apparent that the breach committed by the petitioner -5- ## **W.P.(C).No.33958 of 2011 & W.P.(C).No.5960 of 2012** was in the payment of property tax, which is a yearly levy. The breach would have to be attributed to the year in respect of which the petitioner defaulted in the property tax dues. In that view of the matter, the 1[st] respondent cannot proceed against the petitioner for recovery of dues pertaining to the period more than three years prior to the issuance of the recovery notice. The decision of the Supreme Court in **State of Kerala v.** **V.R.Kalyanikutty (AIR 1999 SC 1305),** is authority to support the contention of the petitioner that the demand made against him is hit by the provisions of limitation. Accordingly, I quash Exts.P1, P3 and P5 notices issued to the petitioner by the 1[st] respondent in W.P.(C).No.33958 of 2011 and Exts.P1 and P3 notices issued to the petitioner by the 1[st] respondent and Ext.P4 notice issued to the petitioner by the 2[nd] respondent in W.P.(C).No.5960 of 2012, to the extent impugned therein, and allow these writ petitions with consequential reliefs. ## **A.K.JAYASANKARAN NAMBIAR JUDGE** mns/24.05.16 -6- **W.P.(C).No.33958 of 2011 & W.P.(C).No.5960 of 2012**