M.P. Joy and Others v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE ANTONY DOMINIC** ## **TUESDAY, THE 26TH DAY OF FEBRUARY 2013/7TH PHALGUNA 1934** ## **WP(C).No. 4310 of 2013 (K)** ## **--------------------------------------** **PETITIONERS:** **---------------------** **1. M.P. JOY, MUTTAMTHOTTIL HOUSE, ANGAMALI, ANGAMALI P.O, PIN- 683 572.** **2. M.J. JENOY, MUTTAMTHOTTIL HOUSE, ANGAMALI P.O, ANGAMALI, PIN - 683 572.** **3. M.J. JETTO, MUTTAMTHOTTIL HOUSE, ANGAMALI P.O, ANGAMALI -683 572.** **BY ADVS.SRI.P.KESAVAN NAIR, SRI.K.G.CLEETUS, SRI. PAUL VARGHESE (PADAYATTIL).** **RESPONDENTS:** - **------------------------** ## **1. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM – 695 001.** **2. REVENUE DIVISIONAL OFFICER, OFFICE OF THE R.D.O, FORT KOCHI – 682 001.** **3. TAHSILDAR,** **OFFICE OF THE TAHSILDAR, ALUVA TALUK, ALUVA – 683 101.** ## **4. MANJUSHA SONI,** ## **PUTHEN HOUSE, NEELEESWARAM, KALADY – 683 574.** ## **5. SHAIJI THANKACHAN,** ## **VATTAPPARAMBA HOUSE, NAYATHODE, ANGAMALY – 683 572.** **Prv.** ## **W.P.(C). NO.4310/2013-K:** **6. FR. SKARIYA THELAPPILLY, C/O. V.V. VARKEY, THOOTTUMGAL HOUSE, H NO 12, KALPAKA NAGAR, ATHANI, NEDUMBASSERY – 683 585.** **7. MANJULA,** - **PUTHEN HOUSE, NEELEESWARAM, KALADY – 683 574.** **8. POULOSE.T. VARIATH,** - **C/O V. VARKEY, THOTTUMGAL HOUSE, H. NO 12/ KALPAKA NAGAR, ATHANI, NEDUMBASSERY – 683 585.** **9. JINSON STEPHEN,** - **PALLICKA HOUSE, NELEESWARAM P.O, KALADY – 683 574.** **10. PRINCY ANTONY,** - **MUNDADAN HOUSE, NAYATHODE P.O, ANGAMALY – 683 572.** **11. SAMUEL T. VARIATH,** - **C/O V. VARKEY, THOOTTUMGA HOUSE, H. NO 12,** - **KALPAKA NAGAR, ATHANI, NEDUMBASSERY – 683 585.** **12. GEORGE P.A, PALISSERY HOUSE, CHEMBANNOOR, ANGAMALY – 683 572.** **13. SIJO JOSEPH,** - **PUTHUPPARA HOUSE, KIDANGOOR P.O, THURAVOOR VILLAGE, ANGAMALY – 683 572.** **14. JOLLY K.K, KOTTASSERY HOUSE, VELUPADOM P.O, VARANDARAPPILLY VILLAGE, THRISSUR – 682 001.** **15. BINU THUDIYAN, THUDIYAN HOUSE, NAYATHODU, ANGAMALY – 683 572.** **16. DR. ELSAMMA PAUL,** - **KUNNATHUKUZHI HOUSE, HOUSE NO XXI/153A, ANGAMALY – 683 572.** **17. JUSTIN DAVIS,** - **KURICHIPARAMBIL HOUSE, KOLATHUR, NEYYAI P.O, THRISSUR – 682 001.** **18. GOERGE K.A, KALLUMKAL HOUSE, VARAYANNOOR, PULLAD P.O, KOIPURAM VILLAGE, THIRUVALLA – 689 101.** **19. SUDHIR KRISHNAKUTTY,** - **ELAYATH HOUSE, CHAZHOOR VILLAGE, THRISSUR – 682 001.** **Prv.** ## **W.P.(C). NO.4310/2013-K:** ## **20. THOMAS SAMUEL, CHANJAPLAMOOTIL HOUSE, ANGAMALY – 683 572.** **21. NYJO MOOLAN, MOOLAN HOUSE, NEDUMBASSERY, ANGAMALY – 683 572.** **22. BINU GEORGE, C/O VARKEY, THOOTTUMGAL HOUSE, H. NO 12, KALPAKA NAGAR, ATHANI, NEDUMBASSERY – 683 585.** **23. VARGHESE PHILIP, CHARUMMOOTTIL HOUSE, CHERUKOLE P.O, KOZHENCHERRY VILLAGE, PATHANAMTHITTA – 689 645.** **24. SHAJI SIVADASAN, HOUSE NO X/ 164, KKALLUVATHUKKAL PANCHAYATH, SREENILAYAM, PARIPPILLY P.O, KOLLAM – 691 001.** **25. THOMAS, VELIYATHUPARAMBIL HOUSE, EDAYATTOR, MELADOOR P.O, THRISSUR – 682 001.** ## **R1 TO R3 BY GOVERNMENT PLEADER SMT. K.A. SANJEETHA.** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26-02-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Prv.** ## **W.P.(C). NO.4310/2013-K:** ## **APPENDIX** ## **PETITIONERS' EXHIBITS:** - **EXT.P.1: COPY OF THE AGREEMENT DTD. 08/05/2007 EXECUTED BETWEEN THE P.1. AND THE R.4.** - **EXT.P.2: COPY OF THE SALE DEED DTD. 04/03/2011 EXECUTED IN FAVOUR OF THE R.4.** - **EXT.P.3: COPY OF THE NOTICE OF DEMAND IN FORM VI DTD. 26/11/01.** - **EXT.P.4: COPY OF THE APPEAL MEMORANDUM DTD. 26/12/2011.** - **EXT.P.5: COPY OF THE RECEIPT DTD. 13/12/2011 OF RS. 277650/- ISSUED BY THE VILLAGE OFFICER, ANGAMALY.** - **EXT.P.6: COPY OF THE REMAND ORDER DTD. 21/07/2012 ISSUED BY THE R.2.** - **EXT.P.7: COPY OF THE ORDER NO. C-7-253/2011 DTD. 21/01/2013 ISSUED BY THE R.3.** - **EXT.P.8: COPY OF THE NOTICE OF DEMAND NO.C7-253/11 DTD. 21/01/2013.** - **EXT.P.9. SERIES: COPIES OF RECEIPTS DTD. 11/10/2006 ,15/03/2007, 12/04/2007 AND 18/05/09.** - **EXT.P.10: CARBON COPY OF RECEIPTS (17 NOS.) ISSUED IN FAVOUR OF THE R.5. FROM 31/05/2007.** ## **RESPONDENTS' EXHIBITS: NIL.** ## **//TRUE COPY//** ## **P.A. TO JUDGE** **Prv.** ## **ANTONY DOMINIC, J** - - - - - - - - - - - - - - - - - W.P.(C).4310/2013 - - - - - - - - - - - Dated this the 26[th] day of February, 2013 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ## **JUDGMENT** Heard the learned counsel for the petitioners and the learned Government Pleader appearing for the respondents. 2. Petitioners are partners of a firm by name “EMJAY BUILDERS”. They constructed a multi storied apartment complex, a part of which was used for commercial purposes. According to the petitioners, the residential flats and the car parking are owned by respondents 4 to 25. It is also their case that the apartment complex was constructed based on the agreements executed by the respective owners and utilizing the cost contributed by each one of them. However, treating the entire building as one unit, assessment under the Kerala Building Tax Act was completed and Ext.P3 assessment order was issued. That assessment order was challenged in Ext.P4 appeal. The appellate authority remanded the matter for fresh consideration as per Ext.P6 order. Accordingly, Tahsildar reconsidered the matter and passed Ext.P7 order. **W.P.(C).4310/13** 2 3. Insofar as the plea of the petitioners that each one of the apartments owned by respondents 4 to 25 should be separately assessed in the name of its owners is concerned, that plea of the petitioners was rejected by the Tahsildar on the ground that the petitioners did not produce any documents substantiating their contention that the cost of construction was contributed by the owners of the apartment themselves. However, in Ext.P7 the Tahsildar separately assessed the commercial part of the building and the residential part of the building. 4. Impugning Ext.P7, assessment was completed assessing the entire building as one unit. Counsel for the petitioner contended that Exts.P1 and P2 agreement and the sale deed itself show that the owners of the apartments contributed the cost of construction and therefore, flats should have been assessed separately, giving the benefit of the 2[nd] explanation to Section 2(e) of the Kerala Building Tax Act. He also placed considerable reliance on the principles laid down by this Court in **Tharu v. Tahsildar (2003 (1) KLT 219)** , where it has held thus:- **W.P.(C).4310/13** 3 _The next contention raised by the petitioner is against the assessment of building as a single unit in the name of one of the land owners. Of course some residential flats and part of the building constructed for commercial purposes are retained by the land owners which according to the petitioner was the consideration for giving the land to the Builders for development and for sale of the proportionate right in land to other Buyers. It is evident from the documents produced that the Builders, namely, Mansion Builders, has constructed the building under agreement with flat owners who advanced amounts for the construction of the Building. Explanation 2 to S. 2(e) makes it clear that if the building comprises of different apartments or flats constructed by sharing cost of construction by the owners jointly, then each such apartment or flat has to be treated as a separate unit, the section is as follows:_ _2.Definition:- In this Act, unless the context otherwise requires:-_ _(e). building means a house, out-house, garage or any other structure, or part thereof, whether of masonry, bricks, wood, metal or other material but does not include any portable shelter or any shed constructed principally of mud, bamboos, leaves,_ **W.P.(C).4310/13** 4 _grass or thatch or a latrine which is not attached to the main structure._ _Explanation 1:.............._ _Explanation 2: Where a building consists of different apartments or flats owned by different persons and the cost of construction of the building was met by all such persons jointly each such apartment or flat shall be deemed to be a separate building. ................._ _When the flat is constructed by the Builder under contract with the owner the cost borne by the owner or the consideration paid by him to the Builder is the cost of construction of such flat. Therefore when a building is constructed under agreement with different flat owners, the total consideration paid by all the owners constitutes the cost of construction of the building. What costs to the owners is the cost of construction and not what is spent by the Builder. Ultimately when the construction is completed and the flats are handed over by the Builder to the owners, it has to be necessarily found that the cost of construction is met by all the owners jointly as the amounts collected by the Builder constitute the cost of construction. It is immaterial whether some of the flats are retained by the land owners or the Builders because there is valuable consideration in such cases also and so much so there is sharing of cost by them as well. So far as the cost of construction_ **W.P.(C).4310/13** 5 _is met by all the flat owners, then each apartment or flat has to be separately assessed. Therefore, in the present case each flat calls for separate assessment in the name of the owner, treating such flat or apartment as a separate building. This is the proposition consistently laid down by this court in a large number of cases starting from S.Babu v. State of Kerala (1994) KLJ (TC) 278. Tahsildar has to necessarily identify the building with reference to its use. This Court has held in the decision reported in Sukumaran v. Tahsildar 1992 (2) KLT 373 and Lizzy Lijju v. Tahsildar 2000 (3) KLT 497 (DB) and in M/s.Pioneer Shopping Complex (P) Ltd. v. Tahsildar W.A.1786 of 1998 that where the building includes both commercial as well as residential apartments, the same has to be separately assessed at different rates in proportion to the area used for residential and commercial purposes. The building in question is constructed with a godown for commercial purpose and flats for residential purposes. Therefore, the respective area has to be identified with reference to it's use or purpose, measured and assessed separately in the name of the respective owner._ _An aspect which has not been so far considered in the case of assessment of flats or apartments is the method of assessment of common areas which also constitute part of the building. The Act and the Rules are silent on this aspect. The_ **W.P.(C).4310/13** 6 _common areas in a flat are used by co-owners and no part of it is exclusively owned by any of the owners. Moreover, all the owners together are joint owners of the common areas because without such common areas, the flat cannot be used. Therefore the common areas such as corridors, pathways, stair cases, security rooms, or any other area used by flat owners commonly have to be assessed along with the building. Even though part of a building also constitutes a building within the definition of the term contained in S.2(e) of the Act, there is no scope for assessment of building in parts. Therefore_ _the common areas cannot be assessed independently and have to be necessarily assessed along with other portions of the building. Since the Act provides for assessment of each flat separately, the common areas have to be apportioned among the flats in proportion to the area of the flats. Therefore the assessing authority has to necessarily take the total plinth area of the common areas such a corridors, stair cases, lift areas, security rooms, generator room and other areas commonly used by the flat owners, appoint on the same in proportion to the plinth area of each flat, and the same should be added to the plinth area of each flat. Of course dedicated constructions such as car sheds, balconies etc., attached to various flats have to be separately added to the plinth area of the respective flat and should not be treated as common area. The_ **W.P.(C).4310/13** 7 _assessing authority h as to make assessment in such a manner that no constructed area in a building complex should be left out from assessment, for the reason that the same is not exclusively owned by anyone but is commonly used by owners of the building.”_ 5. Counsel also produced before this Court Exts.P9 and P10 series of receipts evidencing payment made by the respective owners towards the cost of the building. According to him, it was utilizing the money so paid, that the apartment complex was constructed. 6. Reading of Ext.P7, the impugned order shows that the reason for the assessing authority to assess the apartment complex as one unit and in the name of the petitioner was the absence of documents evidencing payment of cost of construction by the respective owners. By producing Exts.P9 and P10, petitioners are seeking to contradict this conclusion. 7. In my view, if these documents were available with the petitioners, petitioners should have been certainly produced these **W.P.(C).4310/13** 8 documents before the assessing Officer itself so that he could have gone through the documents, verified its reliability and on that basis, arrived at his own conclusions. Ext.P7 order shows that the petitioners have not produced these documents before the assessing Officer. 8. In such circumstances, although I am unable to find fault with the assessing Officer for the view he has taken, still if, as stated by the petitioners, construction was completed utilizing the cost of construction contributed by the owners, the building is liable to be assessed in the manner as indicated by this Court in the aforesaid judgment. Therefore, I am inclined to give the petitioners yet another opportunity to produce the documents including those now produced before this Court, so that the assessing Officer can have a fresh examination of the matter. In order to enable the petitioners to produce the documents before the assessing Officer and the assessing Officer to have a fresh examination of the issue, I set aside Ext.P7. Petitioners are directed to produce documents which they want to rely on, before the 3[rd] respondent within two weeks from today. On such production 3[rd] respondent, who will 9 ## **W.P.(C).4310/13** issue notice to th petitioners, hear them and pass fresh orders in the matter. It is also made clear that in the event 3[rd] respondent finds that respondents 5 to 24 are liable to be assessed, notice shall be independently issued to them as well. 9. Petitioners will produce a copy of this judgment before the 3[rd] respondent for compliance. Writ petition is disposed of as above. ## **Sd/- ANTONY DOMINIC, JUDGE** mrcs /true copy/ sd/- P.A. To Judge