Mumbai: Senior citizen takes on BMC over rogue tenant's property tax dues

David is taking on Goliath. An Andheri resident plans to file a writ petition in court against the Brihanmumbai Municipal Corporation (BMC) for seizure of his property for non-payment of taxes amounting to Rs 13 lakh, a large chunk of which is owed by his tenant.

Bharat Patil claims that Shantashram, the building in Andheri West which is in the thick of the dispute. Pics/Shadab Khan
Bharat Patil claims that Shantashram, the building in Andheri West which is in the thick of the dispute. Pics/Shadab Khan

Bharat Patil (65), a businessman who owns a two-storey building — Shantashram — in Andheri West, says the ground floor has been rented out to Canara Bank, which ran a branch from there from 1971-2012. A 2,000-sq ft space on the first floor was let out to a private retail company from 2006-2011. In his agreements with both tenants, he had made it clear that they would have to pay the property taxes to the BMC themselves.

He had even handed over letters to the BMC in June 2009, declaring that he had rented out the space and that the tenants would pay their respective taxes.

“While Canara Bank complied with the agreement, the retail company did not. The firm did not pay taxes for five years, and then fled. Their dues come to around R9 lakhs. My outstanding dues are only Rs 4 lakh. Why should I pay the rest? The BMC should recover the dues from the tenant,” says a miffed Patil.

Patil’s property was seized by the BMC in February.

“Grave injustice has been done to me. I don’t have an option now but to move court. I will file a writ petition against the BMC,” says Patil.

The property is still in his late father Chandrakant’s name, but Patil is the legal heir and stays on the upper floors. Patil claims that the BMC, in fact, owes him Rs 32 lakh in refund of property tax.

When the property tax rates were revised by the BMC in 2013 based on market value of the entire property and not occupied space, Patil’s property, like many others’, became eligible for a refund of Rs 32 lakh. Since Canara Bank had duly paid its taxes during the period, it’s staking a claim to the refund.

But there’s a loophole. A letter, dated January 1 this year, written by the K/West ward office to the manager of Canara Bank, states that in case a property is shared between tenant and owner, the refund will be credited to the owner’s bank account. The property will be considered one entity with one property account number and, therefore, the money will be deposited in the owner’s account. “The letter is pretty clear. The BMC should credit the money in my bank account. Then, the bank and I will mutually decide what to do with it,” says Patil.

Ratnakar More, senior manager of Canara Bank, however, is not buying this claim. “The owner has absolutely no claim on the refund. We paid the taxes; we should get the refund. I have even submitted an indemnity on the matter. Why isn’t the BMC returning our money? The bank will be forced to move court [if the refund is not given to us].”

He says the new BMC rule cannot be applied retrospectively and is, therefore, not applicable in this case.

‘Onus on owner’
The bank’s claim has the backing of MG Deokate, assistant assessor and collector, K/West ward. “A letter had been issued by the BMC, stating that the refund is to be parked with the owner. But in this case, it is clear that the bank has complete right over the money since it is the bank which paid the extra property tax. It has been demanding the refund from us. We have raised the issue with our legal department,” he says.

As for the Rs 9 lakh which the retail company owes, Deokate clarifies that it is the owner’s responsibility to recover money from it and not the BMC’s. “Tax is on a property and not an individual. He owns the property, he has to pay.”

To this, Patil refers to a 1991 HC order, which said that the BMC is liable for collection of property tax from a lessee/licensee if he/she has agreed to such an arrangement.

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