Municipal Bodies Can't Recover Rent Dues As Arrears Of Land Revenue, May File Civil Suit: Allahabad High Court

The Allahabad High Court has held that arrears of rent due to a Nagar Palika Parishad from its tenant cannot be recovered as arrears of land revenue, as such rent is a contractual due and not a tax.Section 173-A of the Uttar Pradesh Municipalities Act, 1916 permits a Municipality to apply to the Collector for recovery, as if it were an arrear of land revenue, of any sum due to a board on account of a tax, other than a tax payable upon immediate demand. The Collector, on being satisfied that the sum is due, proceeds to recover it in that manner.The bench of Justice J.J. Munir and Justice Indrajeet Shukla held,“…. assuming that the rent in question was due to the Nagar Palika from the petitioner, it cannot be recovered as arrears of land revenue, in view of the clear provision under Section 173-A of the Act of 1916.”A shop in the premises of the Nagar Palika Parishad, Tahsil Swar, Rampur was let out to the petitioner in 1998 for a term of fifteen years, but possession was not delivered until 2006. By a resolution dated 30th December 2006, the Nagar Palika decided that rent would run from November 2006 and would be deposited by the 5th day of each succeeding month. The petitioner filed an affidavit of the same date recording those terms and thereafter deposited rent month by month.The Executive Officer, acting on an order of the District Magistrate, issued a notice demanding Rs. 1,07,800 as rent for the period before November 2006, to be deposited within seven days. The petitioner's requests that rent not be charged for the period when he was out of possession went unheeded. The Tahsildar, Tahsil Swar, Rampur issued the impugned recovery citation dated 14th September 2009.In its counter affidavit, the Nagar Palika stated that it had itself resolved not to recover rent for any period before November 2006, but that a demand note for rent from July 1999 to November 2006 was sent on the directions of the District Magistrate. It also pleaded that the citation was merely a step in aid of the demand note, which had not been challenged, and that the petitioner was liable under Section 3 of the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972.The Court held that what Section 173-A makes recoverable as arrears of land revenue is a sum due on account of tax alone, whereas the amount claimed here was rent for the period between allotment of the shop and delivery of possession.Referring to the Act of 1972, the Court held that a Nagar Palika is neither the State Government nor a Corporation as defined under Section 2(a) of that Act, and that the petitioner was not party to any agreement relating to a loan, advance, grant, credit or guarantee of the kind Section 3 contemplates.“Given the character of the Nagar Palika as a body corporate, recovery of its contractual dues are beyond the contemplation of public money recoverable under the Act of 1972. By no stretch of logic can the said Act apply to dues of money on account of rent that is payable to Nagar Palika by a tenant. These are absolutely contractual dues.”The Court further noted that in Nand Kishor v. Collector/District Magistrate, Rampur, which concerned rent of a shop due to the same Nagar Palika for substantially the same period, a Division Bench had held that the Nagar Palika could not realise arrears of rent by the modes prescribed under Sections 166 to 173 of the Act of 1916, which do not authorise recovery as arrears of land revenue. The impugned citation having been issued under Sections 279 and 280 of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, the Court held that this course was not permissible, though the dues could be recovered by a suit, subject to the bar of limitation.Accordingly, the petition was allowed and the citation dated 14th September 2009 was quashed, leaving it open to the Nagar Palika Parishad, Swar, Rampur to recover its dues by any other mode permissible in law. Case Title: Rayeesh Ahmad vs. State of U.P. and others 2026 LiveLaw (AB) 538Case citation: 2026 LiveLaw (AB) 538Click Here To Read/Download Order

Municipal Bodies Can't Recover Rent Dues As Arrears Of Land Revenue, May File Civil Suit: Allahabad High Court

Upasna Agrawal

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Upasna Agrawal

Municipal Bodies Can't Recover Rent Dues As Arrears Of Land Revenue, May File Civil Suit: Allahabad High Court

Upasna Agrawal

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Upasna Agrawal

This is a premium content
Available exclusively to
Our subscribers