Paying Tax Does Not Legalise Illegality: Bombay High Court Refuses to Shield Alleged Unauthorized Structure

“Burden Lies on Plaintiffs to Prove Structure Was Erected With Requisite Permissions”, In a decisive ruling reaffirming the rigour of Section 351 proceedings, the Bombay High Court dismissed an appeal challenging a demolition notice issued under Section 351 of the Mumbai Municipal Corporation Act, 1888.

Justice Jitendra Jain upheld the City Civil Court’s dismissal of the suit, holding that the plaintiffs had completely failed to establish that the structure in question was legal and authorized. The Court crystallised the controversy in a single question:

“The short point which arises for my consideration is whether the plaintiffs have proved by documents that the suit structure is legal and in accordance with the permissions obtained from the Corporation.”

The answer, on facts, was firmly against the appellants.

Challenge to Section 351 Notice

The impugned notice dated 5 February 1999 described the alleged unauthorized structure at S.J.K. Compound, CTS No. 156, Mohili Village, Mumbai-72. The plaintiffs approached the City Civil Court contending that the structure was legal, situated in a slum area, and protected under policy.

The Trial Court framed multiple issues and returned findings against the plaintiffs on every material aspect, including legality of the structure, slum status, tolerability under policy, and validity of the demolition order. The suit was dismissed with costs.

The appeal required the High Court to determine whether those findings warranted interference.

“Mere Property Tax Receipt Does Not Establish Legality”

One of the primary documents relied upon by the appellants was a property tax receipt dated 3 October 1998. It mentioned the name of a lessor — Mohd. Yusuf Trust — and described one of the plaintiffs as a lessee.

The Court found this wholly inadequate. The receipt did not mention the CTS number corresponding to the notice. No lease agreement between the Trust and the alleged lessee was produced. The Court observed that mere payment of tax cannot validate a structure unless it is shown to have been constructed with sanction.

The reasoning reflects a consistent judicial approach that assessment or tax receipts relate to fiscal liability, not structural legality.

Rent Receipts Without Identification Held Insufficient

The appellants also relied upon rent receipts issued in favour of tenants in Mahesh Kumar Maurya Chawl. These receipts did not mention any room number. They pertained only to the years 1994-95 and not to any earlier period such as 1964 or 1969, which could have supported an argument of longstanding existence.

No tenancy agreement was produced. The Court found that such receipts merely evidenced occupation or payment of rent, not authorization of construction.

“Notification of Slum Area Must Relate to the Suit Property”

The appellants attempted to rely upon a 1978 notification declaring CTS No. 156 of Village Saki as a slum area. The Court rejected this submission, noting that the impugned notice pertained to Mohili Village, whereas the notification concerned Village Saki.

In absence of proof linking the notification to the suit premises, the document was held irrelevant.

Admissions in Cross-Examination Proved Decisive

The Trial Court had recorded damaging admissions by the plaintiffs’ witness. He admitted that he was not residing in the suit premises and did not know the exact year of construction. He further admitted that assessment bills related only to land and not the structure.

Significantly, he acknowledged that no document had been filed to show existence of the structure since 1969. He also expressed ignorance regarding any tenancy agreement or the identity of the person who constructed the structure.

Equally important was the fact that the principal plaintiff did not enter the witness box. The High Court found no error in the Trial Court drawing adverse inference.

The absence of sanctioned plans, commencement certificates, or any municipal approval proved fatal.

Ration Card and Electricity Bills Found Unhelpful

The Court noted that the ration card did not bear the address of the suit premises. The electricity bills were not shown to relate specifically to the structure described in the Section 351 notice.

Without clear identification and linkage to CTS No. 156, Mohili Village, such documents could not establish legality.

“Notice Read as a Whole Was Sufficiently Clear”

The appellants argued that the notice did not specify which portion was unauthorized. The Court rejected this contention, observing that when the notice is read along with the accompanying sketch, it clearly identifies the structure.

It was therefore incumbent upon the plaintiffs to produce documentary evidence of sanction before the Assistant Engineer and before the Court. Instead, only general submissions were made.

Appellate Court Declines to Reappreciate Evidence

Justice Jain emphasised that the Trial Court had delivered a detailed, reasoned judgment after appreciating oral and documentary evidence. No perversity or legal infirmity was demonstrated before the High Court.

“The learned counsel for the plaintiffs has not rebutted any factual findings of the Trial Court before me.”

In such circumstances, appellate interference was unwarranted.

Appeal Dismissed

The High Court dismissed the First Appeal, holding that the plaintiffs had failed to prove that the suit structure was erected with requisite permissions or was otherwise legal.

However, in a measured relief, the Court granted a stay of eight weeks to enable the appellants to take appropriate steps in accordance with law.

This ruling reinforces a fundamental municipal law principle: occupation, tax payment, or tenancy does not equate to authorization. In Section 351 proceedings, the burden rests firmly on the occupant to demonstrate legality through sanctioned plans and approvals. In absence of such proof, demolition notices will withstand judicial scrutiny.

Date of Decision: 16 February 2026