Court No. - 39 Case :- WRIT - C No. - 33761 of 2018 Petitioner :- Shakeel Ahmad Respondent :- State Of U P And 2 Others Counsel for Petitioner :- Ashiyam Nasir,Shabeena Begum Counsel for Respondent :- C.S.C.
Hon'ble B. Amit Sthalekar,J. Hon'ble Rajiv Joshi,J.
Counter affidavit filed by Sri Sunil Kumar Singh, learned counsel appearing for the respondent no.3, is taken on record.
Ms. Shabeena Begum, learned counsel for the petitioner states that she has received counter affidavit but does not want to file any rejoinder affidavit.
We have heard learned counsel for the parties and perused the record.
By means of this petition under Article 226 of the Constitution, the petitioner has challenged the recovery certificate/citation dated 20.7.2018, (Annexure-7), by which a sum of Rs. 7,33,000/- is sought to be recovered from him as arrears of land revenue.
The facts of the case as stated in the writ petition are that the petitioner applied in pursuance of an advertisement dated 10.5.2016 published in a local daily newspaper issued by Nagar Panchayat Maswasi, Rampur for Theka of collecting Tehbazari in respect of weekly market and mela for the year 2016-17. The petitioner being the highest bidder, was awarded the Theka and he deposited a sum of Rs. 1,50,000/- for the weekly market of Friday and a further sum of Rs. 1,00,000/- for weekly market of Thursday in the form of demand drafts. After contract between the parties, a copy of which has been filed as Annexure C.A-5 to the counter affidavit, the Theka was awarded to the petitioner.
Thereafter, it appears that some dispute arose with regard to non-payment of the dues in terms of the contract and therefore, the respondent no.3- Executive Officer, Nagar Panchayat, Mawasi, Rampur cancelled the Theka and issued a demand notice requiring the petitioner to deposit a sum of Rs. 7,33,000/-. In pursuance of the demand notice, the impugned recovery citation/certificate for the same amount has also been issued by the Tehsildar on 20.7.2018.
The submission of learned counsel for the petitioner before us is that the Theka money is not a tax. The Theka was awarded to the petitioner being the highest auction bidder and as such, it is an auction bid money. The contention is that no recovery of the said amount can be made as arrears of land revenue in view of provisions of Section 173-A of the U.P. Municipalities Act, 1916 (hereinafter referred to as the Act of 1916). Section 173-A of the Act of 1916 reads as under:
"173-A. Recovery of taxes as arrears to land revenue-
(1) Where any sum is due on account of a tax, other than octroi or toll or any similar tax payable upon immediate demand, from a person to a board, the board may, without prejudice to any other mode of recovery, apply to the Collector to recover such sum together with costs of the proceedings as if it were an arrear of land revenue.
(2) The Collector on being satisfied that the sum is due shall proceed to recover it as an arrear of land revenue."
A bare reading of the Section 173 (A) of the Act demonstrates that what can be recovered as arrears of land revenue is a tax. The language of the Section itself states that if any sum is due on account of tax, other than 'any tax' payable upon immediate demand, may be recovered as arrears of land revenue.
Reference may also be made to Section 21 of the U.P. Town Areas Act, 1914, which reads as under:
“21. Recovery of arrears-Arrears of any tax imposed under this Act may be recovered on the expiry of three weeks from the date of the issue of writ of demand, on
application to a Magistrate having jurisdiction within the limits of the town area or in any other place within (Uttar Pradesh) where the defaulter may for the time being reside, by the attachment and sale of any movable (or immovable) property belonging to such defaulter and within limits of such Magistrate's jurisdiction”.
Section 21 of the U.P. Town Areas Act also refers to recovery of arrears of 'any tax' may be recovered.
On a conjoint reading of Section 173-A of the U.P. Municipalities Act, 1916 and Section 21 of the U.P. Town Areas Act, 1914, we are of the firm opinion that Theka amount is not a tax, rather it is the highest bid money for performing Theka and therefore, the said amount cannot be recovered as arrears of land revenue in the manner in which, it is sought to be done.
The view that we have taken, is supported by two Division Bench decisions of this Court rendered in the case of Ram Bilas Tibriwal Vs. Chairman, Municipal Board, Titri Bazar, 1998 (2) AWC 1468 and Titu Singh Vs. District Magistrate/Collector, 2003
(5) AWC 3479.
Sri Sunil Kumar Singh, learned counsel for the respondent no.3, however, submitted that an agreement was signed between the petitioner and the respondent-Nagar Panchayat, Mawasi, Rampur, which contains an arbitration clause in paragraph 18 thereof and it mentions that if any dispute arises with regard to the Theka/Contract, then the power to decide the said dispute would vest in the Executive Officer, Nagar Panchayat, Mawasi, Rampur.
Learned counsel for the respondent no.3 further submitted that since there is an arbitration clause in the agreement between the parties, this writ petition is not maintainable and it is always open to the petitioner to invoke the Arbitration Clause 18. It is further stated that if the petitioner had a grievance with respect to the recovery, he could have raised an arbitration dispute.
In our opinion, paragraph 18 of the terms and conditions of the contract cannot be said to be an arbitration clause. What paragraph 18 stipulates is that if there is any dispute with regard to any kind of contract, then power to decide the dispute would vest in the Executive Officer, Nagar Panchayat Maswasi, Rampur and that his decision would be binding upon the contractor.
In an adjudicatory process through the agency of arbitrator, there has to be an independent arbitrator or atleast more than one person so that the contractor may have a choice of person or there should atleast have been a clause whether the contractor may nominate his own person as arbitrator or that the Executive Officer may nominate any independent authority as arbitrator. In paragraph 18 of the conditions of contract, the power to take a decision on any dispute has been vested exclusively on the Executive Officer of the Nagar Panchayat, whose decision would be final. Therefore, we cannot agree with the statement of learned counsel for the respondent that paragraph 18 of the conditions of contract is an arbitration clause. Even otherwise, if the conditions of paragraph 18 of the conditions of contract stipulate that decision of the Executive Officer will be final, it does not deny to the petitioner or deprive him of his rights under the civil law for adjudication of disputes.
In addition to what we have held above, what we find is that in pursuance of the notice of recovery, citation has also been issued to the petitioner. The issuance of recovery citation is beyond the jurisdiction of the Executive Officer to decide and therefore, this petition cannot be dismissed simply on the ground that it is not maintainable in view of an arbitration clause.
We, therefore, allow the writ petition and set aside the recovery citation dated 20.7.2018.
At this stage, learned counsel for the respondent no.3 submitted that in paragraph 33 of the terms and conditions of the contract between the parties, there is a clear stipulation that any damage caused would be recovered as arrears of land revenue.
Be that at it may, the question still remains what will be the mode of recovery and the procedure for such recovery. However, in the light of the observations made above and the view taken, it is always open for the respondents to resort to the mechanism for recovery of the said amount as a civil dispute.
Writ petition stands allowed.
Order Date :- 30.10.2018 Noman