TMI Blog1951 (10) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... oulevard, called upon the Corporation of Justices of the Peace for the City of Bombay, the predecessor in title of the respondent Corporation, to remove its then existing fish and vegetable markets from the site required for the construction of the Boulevard. The then Municipal Commissioner Mr. Arthur Crawford, after whom the present municipal market was named, applied for the site set aside for the exhibition buildings on the Esplanades for the purpose of constructing new markets as the existing markets could not be removed until new markets had been provided. On December 5, 1865, the Architectural Improvement Committee informed the Government that it had no objection to the proposed she measuring about 7 acres being rented to the Municipal Commissioner and suggested that the annual charge of one pie per square yard be levied in consideration of the expense of filling in the ground. Computed at this rate, the annual rental would have amounted to about ₹ 176. On December 19, 1865, the Government passed the following resolution :-- (1) Government approve of the site and authorise its grant. (2) The plans should be submitted for approval; but Government do not consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession of the rest of the land and the buildings thereon without payment of any rent. On March 18, 1938, the appellant Collector of Bombay informed the respondent Municipal Commissioner that it was proposed to assess the land occupied by the Crawford Market under section 8 of the Bombay City Land Revenue Act II of 1876 and asked for certain information to enable him to do so. In his reply, the Municipal Commissioner wrote to say that the site of the market had been given to the Municipality as a gift for the construction of the market and that, therefore. the question of assessment did not arise. The appellant Collector of Bombay having insisted that in spite of the Government Resolution of 1865 the Government had the right to assess the site, the Mayor of Bombay on March 23, 1939, wrote a letter to the Government stating, inter alia, as follows :-- The Corporation have been advised that there can be no doubt that it was the intention of Government to make a permanent grant of the land to the Municipality, and, further, that it was also the intention that permanent grant should be free from rent and from assessment to land revenue. I am to point out that the word rent was. us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sess the said land and that the plaintiff Corporation is entitled to hold the said land for ever without payment of any assessment and that the Government has no right to assess the said premises, (b) That the said assessment may be declared ultra vires, invalid and may be ordered to be set aside. By his judgment dated October 27, 1942, the learned Revenue Judge dismissed the suit with costs. The Corporation appealed to the High Court. Before the High Court, as before us, two of the learned Revenue Judge s conclusions were not challenged. namely, (1) that the Government Resolution of 1865 was-bad in law either as a grant or even as a contract and could not by itself operate to give any interest in the land to the respondent Corporation because of the non-compliance with the formalities required to be observed by Statute 22 23 Vic. C. 41 in the matter of disposition of all real and personal estate vested in the Crown under Statute 21 22 Vic. C. 106, and (2) that the Crown s right to levy assessment on property was a prerogative right to which the ordinary presumption that rights to property which had not been asserted or exercised for a long period of years had been grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the learned Revenue Judge, allowed the appeal and passed a decree declaring the rights of the respondent Corporation and awarding to it the costs in both Courts. The Collector of Bombay appealed to the Federal Court and the appeal has now come up for hearing before us. There has been considerable discussion before us as to the precise scope and effect of the principle of equity enunciated in Ramsden v. Dyson (supra), as to whether such principle should be extended to the facts of the present case, whether the facts of this case attract the application of the equity established in Ramsden v. Dyson (supra)or attract the equity established in Maddison v. Alderson (2) and Walsh v. Lonsdale(3) and finally as to whether, in view of the decision (1) (1937) 39 Bom. L.R. 1046. (3) (1882) L.R. 21 Ch. D. 9. (2) (1883) L.R. 8 App. Cas. 417. of the Privy Council in Ariff v. Jadunath(1), the equity in Ramsden v. Dyson (supra) can prevail against the requirement of formalities laid down in the Victorian Statute referred to above any more than the equity in Maddison v. Alderson (supra)can do against the requirements of the Transfer of Property Act and whether the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the site and erecting and maintaining the market buildings and have been in possession of the land for over 70 years. What, in the circumstances was the legal position of the respondent Corporation and its predecessor in title in relation to the land in question ? They were in possession of the land to which they had no legal title at all. Therefore, the position of the respondent Corporation and its predecessor in title was that of a person having no legal title but nevertheless holding possession of the land under color of an invalid grant of the land in perpetuity and free from rent for the purpose of a market. Such possession not being referable to any legal title it was prima facie adverse to the legal title of the Government as owner of the land from the very moment the predecessor in title of the respondent Corporation took possession of the land under the invalid grant. This possession has continued openly, as of right and uninterruptedly for over 70 years and the respondent Corporation has acquired the limited title it and its predecessor in title had been prescribing for during all this period, that is to say, the right to hold the land in perpetuity free from rent but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y issue on which the parties went to trial and was never put forward before either of the Courts below. Indeed, in the letter of the Mayor of Bombay dated March 22, 1939, to which reference has been made, it was clearly alleged that the word rent was used in official documents with the greatest frequency with reference to the land revenue leviable by the East India Company and later by the Government in the City of Bombay and in the Presidency. In the Government s reply dated January 24, 1940, also quoted above this assertion was never repudiated or denied. In the premises, the appellant cannot be permitted at this stage to raise this contention rounded on the supposed distinction, if any, between rent and land revenue and for the purpose of this case we must proceed on the basis that the word rent in the Government Resolution of 1865 was synonymous with or included land revenue. In our opinion, for reasons stated above, the actual decision of the High Court was correct and this appeal should be dismissed with costs, and we order accordingly. PATANJALI SASTRI j.--I am of opinion that this appeal should be allowed and I will briefly indicate my reasons without recapitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recognising this difficulty in the way of the respondent establishing a legal right to exemption from assessment, held that the conduct of the Provincial Government in allowing and, indeed, encouraging the respondent to erect the buildings at great cost on the faith of the promise not to charge land revenue contained in the Resolution of 19th December, 1865, precluded the respondent on the equitable principle recognised in Ramsden v. Dyson from assessing the land in question, and that this (1) L.R. 64 I.A. 334. (3) (1866) L.R. 1 H.L. 129. (2) (1905) I.L.R. 29 Bom. 580. equity was a right in limitation of the right of the Provincial Government to assess. I am unable to share that view. There is, in my opinion, no room here for the application of the principle of Ramsden v. Dyson(1). That decision has been explained by the Privy Council in Ariff v. Jadunath(2) as based on the equitable doctrine of part performance which, their Lordships held, could not be applied so as to nullify the express provisions of the Transfer of Property Act relating to the creation of leases. They observed :- Whether an English equitable doctrine should, in any case, be applied so as to mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f estoppel by representation arises, for the Government made no representation of fact which it now seeks to deny. Nor can any case of estoppel by acquiescence be rounded on the facts of the case. Both parties knew the facts and neither was misled. There was no lying by and letting another run into a trap [per Cotton L.J. in Russell v. Watts((1884) 25 Ch. D. 559)]. The conduct of the parties was referable to the express agreement evidenced by the Government Resolution of 19th December, 1865, to make a grant of the land free of rent (which, in such context, means and includes revenue). No question, therefore, of any implied contract could arise. Unfortunately for the respondent, the express agreement was unenforceable owing to nonobservance of the prescribed statutory formalities, though it was acted upon by both sides. No question arises here as to the respondent s title to the land which apparently has been perfected by lapse of time. But it is clear that no right of exemption has been established either on the basis of express or implied contract or on the basis of the equitable principles of part performance or estoppel by acquiescence. It was next contended that, on the anal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on those terms was perfected by the adverse possession, the covenant for exemption from assessment forming part and parcel of the title. In other words, the respondent should be placed in the same position as if the Government had made a valid revenue free grant. The argument is, to my mind, fallacious. If the Government had given effect to their expressed intention by executing an instrument in writing observing the due formalities, the respondent would, no doubt, have secured a valid title to the property with a contract binding the Government not to charge revenue, supported as it was by consideration. But, as already stated, the Government s promise not to charge land revenue was unenforceable from the inception, and the respondent s adverse possession of the land, though accompanied by a claim to exemption from revenue, could not destroy the Crown s prerogative right to impose assessment on the land. A somewhat analogous question arose in Goswamini Shri Kamala Vahooji v. Collector of Bombay((1937) 64 I.A. 334). The Government admitted that no land revenue had ever been charged in respect of the land which was enjoyed by the holders for more than a century without payment of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am by the Government, what is meant is land revenue or assessment. The Resolution in question authorized the grant of the site. There is apparently no grant in writing, conforming to the formalities prescribed by the law then in force. Part of the site was wanted for the erection of stables and the question of title to that portion was considered and decided in The Municipal Corporation of the City of Bombay v. The Secretary of State for India in Council ((1904) I.L.R. 29 Bom. 580.), where the Government gave the Municipality notice to quit and brought a suit for rent on the alleged determination of the tenancy. It is part of the same transaction with which we are concerned now, and it seems to me that there was no valid grant. The grant having been authorized, the Corporation went into possession and it is not denied that they have built the Crawford Market at enormous cost. Though the grant was invalid, the Corporation has now acquired a title by adverse possession to the site; this, however, is not the case with reference to the stable site covered by the aforesaid Bombay decision. There the question was brought before the Court, well within the 60 years period. The Crawf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the sites they gave up for forming the eastern Boulevard. The allegation in.paragraph 7 of the plaint that the Corporation acted on the faith of the terms contained in the grant has not been denied by the Government. The accident that the grant was invalid does not wipe out the existence of the representation of the fact that it was acted upon by the Corporation. Even if the suit had been brought within 60 years for ejectment and the Corporation had no answer to such a claim, the right to levy assessment might have conceivably stood on a different footing. In any event, there can be no doubt that it would have been competent for a Court of equity to give compensation for the expenditure and protect the possession in the meantime. Lord Kingsdown refers to this aspect of the matter in Ramsden v. Dyson ((1866) L.R. 1 H.L. 129). In the present case, the Corporation stands on much firmer ground. They have acquired a title to the land which the Government cannot upset or challenge. This acquisition of title is as a result of the law of limitation. It has nothing to do with any conduct on the part of the Corporation which can be said to have rendered the representation about n ..... 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