Full Text
HIGH COURT OF DELHI
Date of Decision: 17th February 2026
MAHANAGAR TELEPHONE
NIGAM LIMITED (MTNL) .....Petitioner
Through: Mr. Chandan Kumar and Mr. Vikram Sharma, Advocates.
Through: Mr. Ankur Mishra, Mr. Gurpreet Singh and Mr. Nitish Dhan, Advocates.
JUDGMENT
1. The present writ petition has been filed seeking set aside of the impugned order dated 1st January 2026, passed by the Chief Executive Officer, Delhi Cantonment Board, wherein it has been held that the petitioner is liable to pay property tax.
2. The brief facts necessary for deciding the present petition are as follows:
2.1. The petitioner, Mahanagar Telephone Nigam Limited (MTNL), is a Government company incorporated in 1986 and is in occupation of the subject property at Shastri Bazar, Delhi Cantonment.
2.2. The subject property was never assessed for property tax by the respondent. However, on 1st December 2021, the respondent issued notices under Section 116 of the Cantonments Act, 2006 (hereinafter ‘Act’), seeking information for the purpose of assessment of property tax. This was followed by another notice dated 19th January 2022.
2.3. Thereafter, on 21st March 2022, the respondent issued a notice under Section 76(1) of the Act, proposing assessment for the period 2019– 2022 and raised a demand of property tax of Rs. 1,05,64,603/-.
2.4. The petitioner filed objections by letters dated 10th May 2022 and 21st July 2022, contending that the property is owned by the Union of India and is exempt from property tax under Article 285 of the Constitution of India and Section 111(2)(f) of the Act.
2.5. Despite the objections raised by the petitioner, the respondent confirmed and determined the Annual Rateable Value (ARV) by communication dated 30th June 2022 and raised a composite demand, inclusive of FY 2022-2023, for Rs. 1,26,67,884/-.
2.6. A notice of demand under Section 100 of the Act was also issued by the respondent on 20th October 2022, followed by recovery notices dated 24th November 2022 and 28th March 2023.
3. The petitioner filed a writ petition being W.P.(C) 4022/2025, which was disposed of by this Court vide order dated 3rd April, 2025, passing the following directions:-
4. Pursuant to the aforesaid order, the petitioner was given a personal hearing by the respondent. The petitioner also filed a representation dated 2nd December 2025.
5. In the impugned order, the issues that arise for consideration have been framed in paragraph 8 of the order, which are set out below:-
6. The impugned order holds that the petitioner is a company having a separate identity from the government and therefore, is not exempted from payment of property tax under Article 285 of the Constitution of India. Accordingly, it was not entitled to exemption under Section 111(2)(f) of the Cantonments Act, 2006.
7. It is the contention of the petitioner that the petitioner is not liable to pay property tax as it is exempted under Article 285 of the Constitution of India as well as Section 111 (2)(f) of the Cantonments Act, 2006. Reliance is placed on the judgment of the Supreme Court in Food Corporation of India v. Brihanmumbai Mahanagar Palika & Ors.[1]
8. Counsel appearing on behalf of the respondent on advance notice, questions the maintainability of the present writ petition. It is submitted that the proper remedy for the petitioner would be to invoke the appellate remedy provided under Section 93 of the Act. It is further submitted that the alternate remedy cannot be held to be onerous merely because there is a requirement to deposit the property tax every year, till the appeal is decided. In this regard, reliance is placed on the judgment in Municipal Corporation of Delhi & Anr. v. Tata Engineering & Locomotive Co. Ltd[2], Ashish Malhotra v. NDMC[3], and St. Mary’s School & Ors. v. Cantonment Board, Meerut[4].
9. I have heard the counsel for the parties.
10. At the outset, reference may be made to Article 285 of the Constitution of India, which is set out below:
11. A reference may also be made to Section 111 (2)(f) of the Act, which is set out below:-
111. Exemption in case of buildings – (1) xxx (2) The following buildings and lands shall be exempt from any property tax other than tax imposed to cover the cost of specific services rendered by the Board, namely:x x x (f) any buildings or lands or portion of such buildings or lands, which are the property of the Government.”
12. Now, a reference may be made to Sections 93 and 96 of the Act, which provide for the filing of an appeal under the Act. The said provisions are set out below:
15. To similar effect are the observations of Coordinate Bench of this Court in Ashish Malhotra (supra), which was in the context of statutory remedy of appeal provided under Section 115 of the New Delhi Municipal Council Act, 1994 (NDMC Act), which also had a requirement for the deposit of the disputed amount of tax.
16. Similar findings were made in the judgment of the Supreme Court in St. Mary’s School (supra), which was in the context of the erstwhile Cantonment Act of 1994.
17. Sections 93 and 96 of the Act are pari materia with Section 169 of the Delhi Municipal Corporation Act, 1958 and Section 115 of the NDMC Act, inasmuch as the assessee is required to deposit the amount in dispute as a condition precedent for entertaining the appeal.
18. To be noted, in the earlier round of litigation, this Court vide order dated 3rd April 2025 had clearly indicated that in the event the petitioner is not satisfied with the speaking order, the remedy of the petitioner would be to file a statutory appeal in terms of Sections 93 and 96 of the Cantonments Act,
2006.
19. Insofar as the reliance placed by the petitioner company on the judgment of the Supreme Court in Food Corporation of India v. Brihanmumbai Mahanagar Palika & Ors.5, the impugned order has distinguished the said judgment as set out below:
20. Mr. Chandan Kumar also placed reliance on the judgment of the Supreme Court in Tamil Nadu Cements Corporation Limited v. Micro and Small Enterprises Facilitation Council & Anr.6, which was dealing with the maintainability of the writ jurisdiction in the context of provisions of the MSME Act. Mr. Kumar places reliance on paragraph 55 of the said judgment, which is set out below:-
21. In my considered view, the case of the petitioner does not fall under any of the three contingencies envisaged in paragraph 55 above. There is no violation of principles of natural justice as the petitioner was duly heard by the respondent before the passing of the impugned order. Similarly, this is not a case where an order is being passed without jurisdiction. Clearly, the respondent/authority was competent to pass an order relating to the exigibility of the petitioner to pay property tax. Simply because the contention of the petitioner that it is not liable to the property tax has not been accepted by the respondent/authority would not result in the order being without jurisdiction. The petitioner has not challenged the vires of any of the provisions of the Act. Hence, the third contingency is also not applicable.
22. It is not the case of the petitioner that it cannot invoke the statutory remedy of appeal on account of financial hardship.
23. In view of the discussion above, the present writ petition is not maintainable and the petitioner would have to invoke its statutory remedy of appeal.
24. Accordingly, the present writ petition is dismissed on the ground of an alternate statutory remedy. Any observations made herein may not be treated to be an observation on the merits of the case.
25. Since the petitioner had approached this Court by filing the present writ petition within the statutory time period of filing an appeal, this Court is of the view that, in the event the petitioner files the statutory appeal within a further period of 15 days from today, the appellate authority would consider condoning the delay in filing the appeal. AMIT BANSAL, J FEBRUARY 17, 2026 Vivek/-