1. The question raised in this application relates to the construction of Clause (b) of Section 119 of the City of Nagpur Corporation Act, hereinafter referred to as the Corporation Act. The same question also arises in Civil Revision Applications Nos. 584, 585, 586 and 587 all of 1959. I have, therefore, heard counsel in all the five cases on the question of construction of Clause (b) of Section 119. There is, however, some difference in the facts of each case. I, therefore, propose to deal with the question of construction of Clause (b) of Section 119 in this case and, then proceed to decide separately each case on its own facts.
2. The facts of the case out of which Civil Revision Application No. 583 of 1959 arises are: Opponent Ramchandra Raju is the owner of a house bearing municipal No. 367 situate in ward No. 1 in Dhantoli, within the limits of the Corporation of Nagpur. The house is in the occupation of four tenants. The house is divided in four separate units and the numbers given to these units are 367, 367/1, 367/2, and 367/3 and each unit which is in occupation of a tenant has been assessed separately. It is not in dispute that it is within the powers of the Corporation to assess portions in separate occupation of a tenant separately for the purposes of property tax. Fresh assessment for the purpose of levy of property tax was undertaken by the Corporation sometime in the year 1958-1959. Actual rent fetched by unit No. 367 was Rs. 10 p.m. that by unit No. 367/1 Rs. 10 p.m., by unit No. 367/2 Rs. 19 p.m. and by unit No. 367/3 Rs. 2 p.m. In the proposed assessment the Corporation proposed to raise the rental value of the house in question. Notice relating to the proposed enhanced rental value was duly given to the opponent (Ramchandra Raju) by the Corporation as required by Section 127 of the Corporation Act. He feeling aggrieved by the proposed increase in the valuation preferred his objections as required by Sub-section (1) of Section 128. These objections were decided by the Objection Officer on June 20, 1959, after hearing Raju. The Objection Officer took into consideration the rent fetched by similar blocks in the neighbourhood and fixed the letting value of unit No. 367 at Rs. 27 p.m., less 10 per cent, of unit No. 367/1 at Rs. 24 per month, less 10 per cent, of unit No. 367/2 at Rs. 30 per month, less 10 per cent and of unit No. 367/3 at Rs. 5 per month less 10 per cent. Peeling aggrieved by the order of the Objection Officer, Ramchandra Raju preferred an appeal to the District Court. That appeal was heard by the Extra Assistant Judge, Nagpur. The learned Judge took the view that determination of annual value of a building under Clause (b) of Section 119 has to be made on the basis of actual rent received by the landlord from his tenant less usual deduction of 10 per cent and consistently with this view he held that the Objection Officer was in error in fixing the annual valuation on the basis of hypothetical rent and not the rent actually received. He, therefore, allowed the appeal and directed the assessor to determine the annual rental valuation on the basis of the actual rent received by the landlord. It is against this order of the appellate Court that the Corporation has preferred this revision under Section 388 of the Corporation Act.
3. Mr. Nandedkar, learned Counsel for the Corporation, contends that it is open to the Corporation under Clause (b) of Section 119 to determine annual value of a building on the basis of a reasonably expected rent and not on the basis of rent actually received by the landlord at the time of assessment. Counsel on behalf of the non-applicants in all the five applications on the other hand contend that where a building is in occupation of a tenant at the time of assessment and the tenant is paying rent which is not found to be a fictitious one then the annual value has to be determined on the basis of actual rent received and not on any hypothetical basis of a reasonable rent. It is argued that in the City of Nagpur, the Central Provinces and Berar Letting of Houses and Rent Control Order of 1949 is in force, that Order grants protection to the tenants and that being the position a tenant who is already occupying premises cannot be expected to vacate it, he cannot also be expected to agree to pay a higher rent and, therefore, it cannot be said that any higher rent can reasonably be expected in respect of those premises by the landlord. The learned Counsel adopted the reasoning of the learned Judge deciding the appeal. In para 3 of the judgment the learned Judge observed:
It is obvious that these rents cannot be increased unless the landlord ejects these tenants or unless the tenants agree to pay enhanced rents. There is nothing on record to show either. It is thus clear that it could not be reasonably expected that the rents could increase in any way at the time of the assessment, I therefore hold that the Objection Officer in holding that they could be reasonably increased regarding their annual rental values. I therefore hold that the actual rents received from each tenant must be taken to be the basis of rental valuation and assessment of corporation taxes.
Though, the learned Judge does not in terms make mention of the Rent Control Order, it is obvious that the provisions of that Order were in his mind in making these observations.
4. The question that falls for determination is whether on true construction of Clause (b) of Section 119 the basis for determination of annual value of a building is the rent actually received by the landlord at the time of assessment or the rent at which the building might reasonably be expected to be let out from year to year at that time.
5. Clause (a) of Sub-section (1) of Section 114 empowers the Corporation to levy property tax. It provides:
For the purposes of this Act, the Corporation shall impose:-
(a) a tax payable by the owners of buildings or lands situated within the City with reference to the gross annual letting value of the building or land, called property tax. Other clauses of Sub-clause (1) relate to imposition of other taxes. Sub-section (2) empowers the Corporation to levy certain other taxes with the previous approval of the State Government. Sub-section (3) empowers the State Government to make rules under this Act to regulate the imposition, assessment and collection of taxes. Section 115 provides the procedure which the Corporation has to follow for imposition of a tax. Sub-section (I) of Section 116 provides that a property tax of not less than 6 1/4 per cent. of the annual valuation determined under that Chapter shall be imposed by the Corporation upon all lands and buildings within the City of Nagpur. Clauses (a), (b) and (c) of Sub-section (1) relate to certain exemptions granted in the matter of imposition of property tax with which we are not here concerned. Section 117 relates to the imposition of property tax on Government buildings. Section 118 empowers the Corporation to grant discount on property tax paid under the circumstances mentioned therein. Section 119 provides the measure by which annual value is to be ascertained. Having regard to the aforesaid provisions to which I have just now referred, it becomes apparent that every land and building situate within the city of Nagpur save and except those exempted under Section 116 are liable to pay property tax. The burden of that taxation falls not on the tenant but on the owner of a building and the tax is computed at not less than 6 1/4 per cent. of the annual valuation determined under Section 119 of the Act. Clause (a) of Section 119 deals with ascertaining the annual valuation of land. We are here concerned with a building and Clause (b) is the relevant clause.
For the purpose of assessing land or buildings to the property tax-...
(b) the annual value of any building shall be deemed to be the gross annual rent at which such building, together with its appurtenances and any furniture that may be let for use or enjoyment therewith, might reasonably at the time of assessment be expected to be let from year to year, less an allowance of ten per cent for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent.Explanations I and II to Clause (6) are not material for purposes of this case.
6. Now, on the terms of Clause (b) the rent actually received at the time of assessment has not been made the basis for ascertaining the annual value; on the other hand, it in terms says that the annual value he determined on the basis of rent at which the building might reasonably be expected to be let at the time of assessment from year to year less an allowance of 10 per cent. By necessary implications it postulates that at the time of assessment the building is available for being let out, that is, it is vacant for being let out, that the landlord is ready to let it out, that a tenant is ready and willing to take it on reasonable rent, and on this hypothesis it directs the authority concerned to ascertain at what rent the building could reasonably be expected to be let out at that time. In other words, what Clause (b) of Section 119 provides is the determination of the amount which a landlord can be expected to receive at the time of assessment from a reasonable tenant as the value for his occupation from year to year.
7. All the lands and buildings situate within the Corporation limits are liable to the levy of property tax. The Corporation, therefore, has to assess annual value in respect of all the buildings situate within its limits. All these buildings would not necessarily be in occupation of tenants. Various situations are bound to arise; some of the buildings may be in occupation of owners themselves ; some of them may be lying vacant which the owners do not desire to let out; some may be in possession of persons other than the owners but for which they do not pay rent. to illustrate, relations of the owners, or ownership vesting in a trust, or institutions or business concerns and the occupation being with its officers or servants who under the terms of their engagement or appointment are entitled to occupy the premises free of rent or at nominal rent. To provide a uniform measure for ascertaining annual value of all the buildings it appears that it has been enacted that annual value be ascertained on the assumption that the building is vacant at the time of assessment and could be let out to a tenant at reasonable rent. Obviously rent actually received cannot be a uniform measure to ascertain annual value of all the buildings situate within the limits of the Corporation, even when the building is in occupation of a person other than the landlord.
8. Now, if it be found that any statutory bar exists at the time of assessment prohibiting a landlord from receiving the hypothetical rent so determined in respect of any particular building, then it cannot be said that that building could reasonably be expected to be let out at that rate at that time. It cannot be lost sight of that incidence of this taxation falls on the owner of the building. It is on this aspect of the case that the provisions of the Rent Control Order will have to be examined. The Legislature of the former State of Madhya Pradesh enacted the Central Provinces and Berar Act XI of 1946 to provide for regulating the letting and sub-letting of accommodation in Madhya Pradesh. Section 2 provides that the State Government may, by general or special order which shall extend to such areas as the State Government may, by notification, direct, provide for regulating the letting and sub-letting of any accommodation or class of accommodation whether residential or non-residential, whether furnished or unfurnished and whether with or without board and in particular-
(a) for controlling the rents for such accommodation either generally or when let to specified persons or classes of persons or in specified circumstances;
(b) for preventing the eviction of tenants or sub-tenants from such accommodation in specified circumstances;
9. Clauses (c) and (d) are not material.
In exercise of the powers conferred on it by Section 2 the Government of Madhya Pradesh issued an order on July 26, 1949, called the Central Provinces and Berar Letting of Houses and Rent Control Order, 1949 and Chapter II thereof relates to fixation of rent. Relevant provisions relating to the topic of fixation of rent are contained in Clauses 3 to 12 of the Rent Control Order. Clause 3 empowers the State Government to appoint a Rent Controller. Clause 4 provides that when on a written application by the landlord or tenant, the Controller has reason to believe that the rent of any house within his jurisdiction is insufficient or excessive, as the case may be, he shall hold such enquiry as may be necessary and record a finding. Clause 5 empowers the Controller to determine the fair rent. Clause 6 provides the mode and measure of determining the fair rent of houses constructed before April 1, 1940, for residential purposes. Clause 7(1) provides the mode and measure for determining the fair rent of houses constructed before April 1, 1940, for non-residential purposes. Clause 7(2) provides the mode and measure for determining the fair rent for houses constructed after April 1, 1940. Clause 8 provides that subject to the provisions of clauses 9, 10 and 11, when the Controller has determined the fair rent of a house-
(a) the landlord shall not claim or receive any premium or other like sum in addition to rent, or any rent in excess of such fair rent; but the landlord may stipulate for the payment of such rent in advance each month;
(b) any agreement for the payment of any sum in addition to rent or of rent in excess of such fair rent shall be null and void in respect of such addition or excess and shall be construed as if it were an agreement for the payment of the fair rent;
(c) any sum, paid in excess of or short of fair rent from the date of the filing of application, before the Controller to the date on which the fair rent is determined, shall be refunded by the landlord or paid by the tenant, as the case may be, or may otherwise be adjusted by mutual agreement.
Clauses 9, 10 and 11 enumerate circumstances under which the landlord may increase the rent even after the order determining the fair rent has been passed. Clause 12 provides that any dispute between the landlord and the tenant in regard to any increase of rent claimed under Clauses 9, 10 and 11 shall be decided by the Controller. Section 8 of the parent Act provides that if any person contravenes any order made under this Act, he shall be punishable with imprisonment for a term which may extend to three years or with fine or with both. Clause 30 of the Order provides that notwithstanding anything contained in this Order, the State Government may, by notification in the official gazette, exempt any house or class of houses or any person or class of persons from all or any of the provisions of this Order. In exercise of its powers the State Government of former Madhya Pradesh issued a notification published in the M. P. Gazette of February 15, 1952, exempting houses constructed on site lying vacant on January 1, 1951, from the operation of the Rent Control Order. It is true that fair rent as would get determined in accordance with the provisions of Clauses 6, 7(1) and 7(2) cannot be termed as reasonable rent or equated with it, but then save and except where fair rent has been determined by the Rent Controller there is no statutory bar prohibiting a landlord to charge or a tenant to pay, reasonable rent. In Sarsivatibai v. Corporation : AIR1957Bom244 , City of Nagpur I observed (p. 377) :.When the provisions of the Order (Rent Control Order) are examined, it is clear that the Order by itself does not fix fair rent. It only empowers the Rent Controller to fix a fair rent when moved either by the landlord or by the tenant. It is only when the Rent Controller is moved by either of them, he gets jurisdiction to fix a fair rent. It does not prevent the parties to amicably settle the rent between themselves, nor does this Order make it illegal to charge and realise the agreed rent which may be at variance with the method indicated in the Order for fixing a fair rent. It is only when such fair rent is fixed by the Rent Controller, the landlord is prohibited from claiming anything in excess of the rent fixed...
10. Clause 13 provides that no landlord shall, except with the previous written permission of the Rent Controller give notice to a tenant determining his tenancy and enumerating the grounds on which the landlord is entitled to get it. Briefly stated the landlord can obtain permission to serve quit notice on his tenant only when the tenant is habitually in arrears with the rent, or sublets the premises without the landlord's written permission, or uses the premises for purposes other than those for which it was let, or commits acts of waste, or nuisances, or the landlord requires the premises for his bona fide residence or for purposes of repairs.
11. Having regard to the provisions of Clause 13 of the Rent Control Order it is true that in a case where a building constructed before the year 1951 and of which annual value is to be determined is in occupation of a tenant at the time of assessment it may not be possible for the landlord to get the premises vacated and rent them out to the aforesaid hypothetical tenant who is ready and willing to pay reasonable rent and yet he would be taxed on that basis, the result may in certain such cases be inequitable but then in construing a taxing statute equity can have little say. Remedy would lie elsewhere.
12. In Cape Brandy Syndicate v. Inland Revenue Commissioners  1 K.B. 64 Bowlatt J. observed (p. 71) :.It is urged by Sir William Finlay that in a taxing Act clear words are necessary in order to tax the subject. Too wide and fanciful a construction is often sought to be given to that maxim, which does not mean that words are to be unduly restricted against the Crown, or that there is to be any discrimination against the Crown in those Acts. It simply means that in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.
These observations of Rowlatt J. have been cited with approval by Viscount Simon in a case that came before the House of Lords, Canadian Eagle Oil Co., Ltd. v. The King (1945) 27 T.C. 205.
13. As already stated, looking fairly at the language used in Clause (6) of Section 119 of the Corporation Act, in my view, it is clear that it contemplates ascertainment of the amount which a landlord can be expected to receive at the time of assessment from a reasonable tenant as the value for his occupation of the premises on the hypothesis that the premises are then vacant and can be let out to a tenant.
14. In result, the application is allowed with costs, the order of the appellate Court is set aside and that of the Objection Officer restored.